What goes up must come down GOLD!

With gold at all time highs how long till it comes down? I'm no expert this is just my armchair analysis. People are buying up gold feverishly at record prices creating an over demand. Eventually there is gonna be a sell off and prices will drop.

It seems to me the only people making money off of gold right now are sellers. All the people that bought gold at over inflated prices are gonna be F-ed when it falls. When it falls the sellers are gonna become buyers.

People that boughts stock in the late 90's didn't think the bottom would fall out of the market but it did.

To me this just seems like one big ponzy scheme created by those at the top.

reply to post by wantsome


Unless of course they are hording it to transform it into monatomic gold so they can dimension shift in time with the 2012 endtime in which case it will never be sold. Just a thought, a rather crazy one i know but this world throws up crazy every day.

So your only explanation as to why the price of gold will drop is 'what goes up must come down'??? Wow that's some serious analysis. I think I'm going to sell all of my gold ASAP. After all, who can argue against gravity.

You have a mistaken understanding of the mechanism of why gold is rapidly rising.

Gold is a constant. A constant value.

The value of gold doesn't change. The value.

I have twenty-dollar gold pieces, ten dollar gold pieces, five dollar gold pieces, and even half-dollar gold pieces.

That ten dollar gold piece was bought for Christmas and cost $990.00.

Ten dollars - sold for $990. The value of the gold never changed.

The damned increasing uselessness of the dollar is what's increased. The current dollar has lost almost a hundred times its former value.

Got a five percent raise lately? That's long gone. They keep printing money to pay interest on money we already owe, and inflation now is kicking in so high that folks are really going to feel some pain this year.

Ten dollars for gold? $990 for gold? Same gold. Just that the dollars when our currency was backed by gold were worth a hundred times more than the dollars we have now.

Gold prices don't rise. Dollar values drop. Gold stays the same, just more and more worthless dollars.

Hope that helps.

Originally posted by endlessknowledge
So your only explanation as to why the price of gold will drop is 'what goes up must come down'??? Wow that's some serious analysis. I think I'm going to sell all of my gold ASAP. After all, who can argue against gravity.

Why not? It's simple, it's possible and it makes sense. Sure, gold goes into many things, but often with a flood of something, you can only gobble it up so fast for use. At some point there will be a leveling off but if it comes in too fast (remember, people are hurting right now... they are going to sell their gold to feed themselves) you're going to push way faster than the demand unless there was a shortage in the first place. At the prices gold stood at before, I really dont see all that much of a demand, myself.

The OP has a point that makes simple sense to me. It could happen. I often thought about it myself.

Well, that's a big question. I am not an expert either, but I'll give it a shot. I don't think most people realize that for gold and silver, there are two types for each. There is the physical gold and silver and then there is the paper gold and silver. Here is a quick definition for everybody:

The term paper gold means you have a piece of paper acting as a substitute for the physical gold. With paper gold, you don't own the gold; you own a promise to receive physical gold. In plain English, it means you are a creditor of the corporation issuing the paper gold certificate, thus subject to counterparty risks. Owning the physical gold has no counterparty risk and is fully under your control.

From: www.igolder.com...

Currently, the paper market is fraught with fraud and is used to manipulate the physical price. As it stands, people are waking up to this and it has forced a backwardation in physical silver (not gold, yet).

Backwardation is the opposite condition, where spot prices exceed forward prices, and the forward curve slopes downward.

From: www.riskglossary.com...

So, essentially, people are rejecting the paper, as it is at risk to another party, in this case, (mostly) JP Morgan. To suppress the physical price, you have to sell the commodity. The problem is that they don't have any physical gold or silver, so they sell the paper, promising to provide it at a later date. So, JP Morgan not only owes people a lot of promised metal, but the demand for physical has now outpaced the production or nearly outpaced it.

So, to get to your question, the first to crash is the paper gold and silver, as it is realized that it never existed. Someone said that before this happens they would sell all the paper silver or gold, flooding the market and crashing the price. However, as said at Zero Hedge:

The price of (paper gold) GLD does not directly interface with the price of gold, except that they supposedly buy gold from the market. The only effect selling GLD will have when the market learns they have no gold is that people will flood from GLD to miners and physical, or something else. There is no method by which such an event could have a negative effect on the price of gold.

After paper goes, then there is just the physical and their prices should spike up until there is a reliable vehicle to transfer the "wealth." Once this vehicle appears and the metal's value is transitioned, the price would drop. There are other scenarios, such as a gold confiscation like in 1933, but that is still up in the air.

The problem with FIAT at the moment is that it is not backed by anything and very subject to inflation. You can sell your gold, if you had it, but the instant you did, you have locked in your FIAT value and are subject to the mechanics of the inflation. Theoretically, if I had gold and sold a coin as I needed food, I would be paying relatively the same price for the food as the day I entered into gold.

Anyway, don't know if that makes sense or if I butchered it. The reality is ... reality is quite questionable at the moment.

reply to post by wantsome


I think you are correct, this is why i don't buy gold.
You truly cannot use gold at anytime.
Try to use it to buy a car, no luck, use it at target or walmart, no luck.
Well if the world comes to an end and the agents of the devil are ruling the road with their leather spiked jackets and nfl shoulderpads....well you get my point you may be able to buy a sammich for an ounce of gold!!!
Wow a $1400 sandwich!! wooot.
Food, water and other modern comforts will be what you need.
So live your life like you want to and eat well and let the fools buy the gold.
Stock up on practical things, things you will use and / or anybody uses.
Gold is the rich mans tool, this tool is used to steal you labor.

reply to post by g146541

The dollar collapses, you won't be able to buy a sandwich for $50,000.

That's why you mix gold and silver.

reply to post by FarArcher


You sir are arguing semantics.
Yes gold does rise and fall in a practical application.
Here is an example, you used to pay a pinch of gold dust for a drink of whiskey.
Would you still pay a pinch for any drink? I hardly think so.
If your boss payed you gold rather than cash, how much weight in gold would he have to pay you?
At 1400 an ounce that is a small chunk of gold, where a 100 years back a full coin would be warranted.

I grow weary of trying to point out things that some folks will never, ever understand. Besides, it took me a lot of money and years of my time for my education.

You're assuming everything will be based on what numbers you're seeing NOW.

You aren't getting it, your perspective is very limited, and it's not looking good for me wasting any more time on.

The dollar collapses - you'll figure it out.

Real quick.

reply to post by FarArcher


If the dollar collapses i will have the food to sell you a sammich for gold though.
or any other commodity i might want or be able to use, and if i don't sell a sammich, i eat well same as always.
Gold is syure prety, and high in minerals i'm sure but it does not digest to well.
Gold is the rich mans scam.

Originally posted by FarArcher
I grow weary of trying to point out things that some folks will never, ever understand. Besides, it took me a lot of money and years of my time for my education.

Funny how that works out, i knew early on gold was a sham, and it cost me nothing to figure that out.
However my cabinets are full of useable items edible or otherwise, i have literal stockpiles of foods that i enjoy.
It seems if i ever do grow "weary" i will have the food and water to envigorate myself!
That work?

reply to post by g146541


Well, it would never get to that. While many people are pushing a doom scenario, the whole exercise is really to preserve your savings, right? So, 20k in the bank may go to zero value, however, 20k of gold now would rise to reflect the highest possible value in a FIAT system. But, that would be hyperinflationary. Realistically, if food prices doubled and everything else did, your gold would be worth 40k (that's simple, but just using it to make a point). However, FIAT dollars would now buy half what it did before, while you could effectively taken no hit with your gold.

I think people think of having gold coins in an end game scenario, where they are walking around the street with guns, using gold coins to buy stuff isn't too realistic at the moment. More likely, our currency will hyperinflate. Those that put it into something else, like cotton, rice or any vehicle outside of that would have stood a chance of preserving what they had before.

Originally posted by g146541
reply to post by FarArcher

 

If the dollar collapses i will have the food to sell you a sammich for gold though.
or any other commodity i might want or be able to use, and if i don't sell a sammich, i eat well same as always.
Gold is syure prety, and high in minerals i'm sure but it does not digest to well.
Gold is the rich mans scam.

Well, I would also consider that people buying gold and silver are also well stocked up on guns, grub and gas, too. These people usually are conservative and like to hold on to what they have, especially peace of mind.

reply to post by alyoshablue


Exactly!!!
If "it will never get to that", then Gold is useless, as you cannot spend it at "The WalMart".
You mention "peace of mind", this is what i get, knowing my family will not go hungry, all the rest i can take care of with my FIAT pension.
If that fails well, then all bets are off anyway and we start at square one.
1 ounce of gold sold for around 370 dollars in 1990, in 2010 it is 1400 dollars.
Now the value of a meal holds the same value today as it did 40 years ago.
if people use the FIAT model to argue that gold never drops, then the same can be said for anything, food included.

reply to post by g146541


Well, I wouldn't say it is useless. In six months I have outgained inflation, so therefore, I have actually preserved some of my purchasing power against FIAT. In this sense, it makes sense.

However, again, in a SHTF moment, I really don't think it would matter. Everyone should at least consider the things everyone in this thread has mentioned, especially food and water (filter).

Pension funds will go before the FIAT does. This scares me at the moment, because my father has one. What some people don't realize is that the Pension Fund Managers may have swapped out some assets or vehicles for the mortgage backed securities that are currently working their way through the system.

The big picture here is that the global elite are making a play on the rest of the world for their savings. Through inflated FIAT currencies, mismanaged pension funds, corrupt governments, etc., they are sucking the wealth from everybody. The last bastion is really only gold or silver. However, as corrupt as the system is, the government can take that too.

We are but slaves on spaceship earth.

i agree that gold will go down also. it is after all, a bubble. I know what you're thinking, "the dollar is inflating, gold will go up forever" well they said the same thing right before the great depression, and the dot.com bubble and the housing bubble and the oil bubble, and any other bubble. During the ramp up everyone thinks the ride will last forever and find any reason they can to justify their position.

i dont know how many arguments i read through on investing boards in 06 and 07 about whether or not there was a housing bubble. i saw people convinced that housing prices are up for good because everyone needs a place to live. same thing when oil was approaching $150 a barrel, everyone needs to drive a car, oil is up for good.

if theres one thing you can count on, its the behavior of humans in a "mania"
when you can buy gold in a vending machine, the party's days are numbered.
history is the best teacher, remember when gold and silver blew up before? (1980ish) you think those people buying at the top thought it was gonna crash back to the ground shortly after? no way! it was headed to $2000 per oz. . right?

be careful friends.

and for the record i do own gold and silver, got gold and 425 and silver at 6 and 9 dollars. first sign of weakness im gone! off to the next big thing.