Gold: Past, Present, and Future

quiettrucker12 said:Stop trying to link gold and inflation so tightly. It’s obvious that gold jumping from $250 to $1,577 during this Goldman Sachs market—that's a 6.3x increase—has nothing to do with inflation. Why is it so hard to grasp that a bull market is just a bull market? Maybe this one is slightly larger than what we've seen before, but you can probably chalk that up to how much politicians love delaying any kind of actual pain. We can call the periods where gold spikes "inflationary," sure, but it doesn't really have anything to do with actual inflation or hyperinflation. Bull markets end in a parabola, so I doubt this one will be the exception. A bull will always find some excuse to rally.

Charles, what’s your take on this recent currency turbulence (at least, that's how it looks to me)? I feel like currencies—not economic fundamentals or even debt—are what everything is revolving around right now. The answer to how the next 5 or 6 years play out lies in the currency game.

The Goldman Sachs bull isn't some paper game like everything else because it's tied directly to the physical market. Central banks are buying gold, and that physical demand acts like a constant pilot light under gold prices, especially since the general public hasn't really jumped into the fray yet. I highly doubt central banks are buying out of fear of inflation; it feels more like they're grabbing starting positions. But starting positions for what?

I agree with that, but let's finally face facts: gold's value isn't what it used to be. It's lost its status as a classic inflation hedge. If you look at production costs, we're talking around $700. Once you factor in actual inflation, gold should be sitting somewhere between $1,200 and $1,300 just to maintain the same purchasing power it had a century ago.

Why is it so hard for people to grasp that a bull market is just a bull market? Sure, maybe this one is running a bit larger than usual, but you can pretty much blame that on the incredible tendency of politicians to delay any kind of pain. We might call those sudden gold spikes "inflationary," but they don't actually have much to do with real inflation or hyperinflation. Bull markets end in a parabolic move, so I doubt this one will be the exception. A bull market will always find some excuse to climb.

Signed! 👍

Central banks are buying up gold, and that physical buying is basically a constant fire under the price since the general public hasn't really entered the game yet. Honestly, I doubt central banks are buying because they're scared of inflation; they're doing it to grab early positions. But early positions for what?

In my view, they’re buying because they see the US is struggling. They realize the US dollar, as the world's number one currency, just isn't what it was 10 or 20 years ago.

They're forced to build up foreign reserves, and to avoid being tied entirely to the dollar, they shift a portion into gold. Many have already dumped the Euro or cut their exposure to a minimum.

The Chinese leadership has even suggested that the issues surrounding the Euro show it was built on rotten foundations and is riddled with flaws. Before the crisis, they were buying Euros; now, they see that the monetary union is full of holes and are getting rid of them.

And besides the Euro, which was always inferior to the dollar, there isn't really a third major currency out there. That makes gold incredibly relevant and desirable right now.

Honestly, you guys are starting to get a little ridiculous with this line of reasoning. No offense intended.
quiettrucker12, the issue isn't Goldman Sachs because of Goldman Sachs itself. It's obvious that paper assets are weak. Personally, I'm hoping they don't lose all their value. That's what we call inflation. The fact that gold was undervalued—causing it to rise faster than inflation rates—is irrelevant. It just speaks to how gold is being treated. But if money wasn't being printed, even though it absolutely has to be, we wouldn't see this much growth because the Dollar and the Euro would actually buy more.
What would Citibank even be preparing for? Let me tell you right now: nothing spectacular, other than perhaps swapping one paper asset for another in a worst-case scenario. No central bank is going to consider tying its own hands by adopting a gold standard. And that's actually a good thing, because it "frees the gold."
rustyseal5: You write these little manifestos without successfully refuting a single one of my data points regarding the price surges in gold and silver, or food and energy—which is where most people's money actually goes.
Using the Laspeyres method to calculate inflation, the rate sits between 7-12% depending on which year you use. That averages out to 9%. Just imagine where you'll be in, say, 10 years...
Keep in mind, these methods date back to the 20th century when the Federal Reserve was barely keeping the Dollar afloat.
And then you twist my words, claiming the Dollar and the Euro are weakening and that "part" of the wealth is shifting into gold. So, decide: is my core argument valid or not? At the very least, refute my numbers. That’s the baseline; anything else is just talking in circles...
Klapalo: You're following the same logic as rustyseal5. The data involving food and energy is undeniable... I didn't make it up.

"Chancellor Pal suffers, I won't even mention Pal's suffering."

vividgull10 said:I’m no economist, but this sounds like total nonsense to me—honestly, it reads more like a cheap political flyer than actual analysis:

...Unfortunately, both indices have their flaws. The issue with the Laspeyres index is that it assumes households buy the exact same basket of goods in period t as they did in period 0. In reality, when prices shift, consumers substitute expensive goods for ones that have become relatively cheaper between period 0 and period t.
By keeping the basket identical across both periods, the Laspeyres index ignores that substitution effect, which ends up overstating the inflation rate.

Look, if we accept that price is a reflection of exchange—which is what economics should be about, since the field literally built price theory—then there’s zero difference in inflation between these two scenarios:
1) I keep buying the same product but pay more for it.
2) I swap out my old product for a new one that costs less.

In both cases, the inflation is effectively the same. The only difference is how I "paid" for it. In scenario 1, I paid with cash; in scenario 2, I paid with my quality of life.

Since there’s no objective way to measure quality of life, but there is a solid price theory, everything ultimately boils down to price—specifically, the price gap between the old product and the substitute.
So, I don't see the problem.
The only inflation rate that actually matters is the one measuring the price change of the exact same product.

Exactly. It’s like when you have a toothache and your dentist used to just yank the tooth out with pliers. Now they actually fix it properly. But no, if the service costs 1% more... that's "inflation"... we're all doomed.😁
It's the same deal with tech, clothing, chemicals, and stuff like that. People completely ignore the fact that things are getting way better and more efficient.

And obviously, people just swap products out. Prices fluctuate in cycles, and plenty of things just go obsolete while newer, better alternatives step in to fill the gap.

rustywalker82: You're on the same page as Noah. Data involving food and energy is undeniable... I didn't make it up.

Mizuzul, look, the Consumer Price Index already accounts for food and energy costs.

quiettrucker12 said:Stop trying to link gold and inflation so tightly. It’s obvious that gold jumping from $250 to $1,577 during this Goldman Sachs market—that's a 6.3x increase—has nothing to do with inflation. Why is it so hard to grasp that a bull market is just a bull market? Maybe this one is slightly larger than what we've seen before, but you can probably chalk that up to how much politicians love delaying any kind of actual pain. We can call the periods where gold spikes "inflationary," sure, but it doesn't really have anything to do with actual inflation or hyperinflation. Bull markets end in a parabola, so I doubt this one will be the exception. A bull will always find some excuse to rally.

Charles, what’s your take on this recent currency turbulence (at least, that's how it looks to me)? I feel like currencies—not economic fundamentals or even debt—are what everything is revolving around right now. The answer to how the next 5 or 6 years play out lies in the currency game.

The Goldman Sachs bull isn't some paper game like everything else because it's tied directly to the physical market. Central banks are buying gold, and that physical demand acts like a constant pilot light under gold prices, especially since the general public hasn't really jumped into the fray yet. I highly doubt central banks are buying out of fear of inflation; it feels more like they're grabbing starting positions. But starting positions for what?

Exactly. It’s not like they’re out there buying ice cream. They aren't exactly printing money just to inflate everyone's pockets so they can afford more treats, either. In the West, nominal incomes have barely budged—just a tiny percentage increase over the last five years.

So why on earth would anyone trust gold when the central banks are basically creating artificial demand by buying it with printed money?

I’ve said my piece, and I’m done. Just a few final points for the record.
Regarding inflation, I rely solely on the methodologies used by the Federal Reserve back when they sacrificed the Hunt brothers and barely managed to save the dollar. Those specific metrics are my only benchmark, and they indicate significantly higher inflation than what is being reported. It might not seem catastrophic over the next year or two, but in the long run, it absolutely is. As for the claim that people are spending 20% of their income—that applies to a very small slice of the population. Only one in six Americans is on food stamps. Every sixth person! That is a massive group to feed. Most families are struggling just to make ends meet, often requiring two incomes just to stay afloat. If someone is out of touch with how the majority actually lives...
And once more, to close this out: since I first posted about the dollar, gold and silver have surged 50%. My conclusions are indisputable and cannot be overturned.
When viewed over a 3-to-5-year horizon, the reality is clear. That is inflation. By definition, inflation means my paper currency buys fewer real goods. Not to mention the system is compromised by corruption, lies, government overreach, and highly skilled manipulation. That is why there is an alternative medium of exchange, which preserves and serves as a vehicle for long-term purchasing power.😉

S&P 500:26211
A 9,000 point jump in just 19 months?
You have to wonder what we were waiting for for nearly a decade to see this kind of stock market performance, and what specific variables shifted to trigger such an unnatural vertical climb. On the flip side, commodity and precious metal prices remain generally quite low. In a few years, we’ll see how the price ratios between equities, commodities, and metals shake out. Still, I want to highlight mining stocks for precious metals. For instance, Rick Rule believes they could see a significant rally as early as this year. When I combine his outlook with what Michael Pento has said, I can say with great confidence that now is the time to buy—including some miners. We've officially crossed a major psychological threshold...

"1351 USD per ounce of gold.😉"

Robert Vaughn10 said:S&P 500:26211
A 9,000 point jump in just 19 months?
You have to wonder what we were waiting for for nearly a decade to see this kind of stock market performance, and what specific variables shifted to trigger such an unnatural vertical climb. On the flip side, commodity and precious metal prices remain generally quite low. In a few years, we’ll see how the price ratios between equities, commodities, and metals shake out. Still, I want to highlight mining stocks for precious metals. For instance, Rick Rule believes they could see a significant rally as early as this year. When I combine his outlook with what Michael Pento has said, I can say with great confidence that now is the time to buy—including some miners. We've officially crossed a major psychological threshold...

"1351 USD per ounce of gold.😉"

It already cleared $1,360!

Egon von Greyerz hits the nail on the head once again:

http://www.24hgold.com/english/news-...on+von+Greyerz

"...outside the jurisdiction..."

Robert Vaughn10 said:Egon von Greyerz hits the nail on the head once again:

http://www.24hgold.com/english/news-...on+von+Greyerz

"...outside the jurisdiction..."

Physical gold and silver will be the best form of wealth preservation and act as insurance against the coming debacle. But it must be held outside a fragile banking system and outside the jurisdiction of the investor.

Sure—but how on earth do you actually pull that off? How are you supposed to bury your gold outside the country where you live, and more importantly, how do you even get back to it when things finally hit the fan?

Amanda Allen4 said:Physical gold and silver will be the best form of wealth preservation and act as insurance against the coming debacle. But it must be held outside a fragile banking system and outside the jurisdiction of the investor.

Sure—but how on earth do you actually pull that off? How are you supposed to bury your gold outside the country where you live, and more importantly, how do you even get back to it when things finally hit the fan?

Is this level of play even necessary?
Right now, especially...
But yeah... one day someone might just say...
give us... the precious metal... and then... the feeding frenzy begins...
and the price is already sitting at $100 bucks...
actually, the price is already high... very high... and I have to admit...
the new converts are starting to trickle in... we'll see...
So, how should I put this... let me flip the argument...

"...in a bloody blur..."

What kind of answer is that supposed to be to my question?

Let me repeat myself—how does one actually hold physical gold outside of the banking system, specifically in a jurisdiction other than where they reside, and how do you go about accessing it when the need arises?

Do you know, or do you not? I am asking because I don't have the answer.

How exactly is some government jurisdiction supposed to get their hands on gold that my spouse and I know exists, tucked away exactly where we buried it?

It’s our own private gold standard. It has zero connection to any third party unless we decide to bring it into the mix, so frankly, neither the state nor its laws even stand a chance.

I don't even follow the logic behind the question.

Michael Morgan5 said:How exactly is some government jurisdiction supposed to get their hands on gold that my spouse and I know exists, tucked away exactly where we buried it?

It’s our own private gold standard. It has zero connection to any third party unless we decide to bring it into the mix, so frankly, neither the state nor its laws even stand a chance.

I don't even follow the logic behind the question.

My question concerns the advice given by Egon von Greyerz—specifically his suggestion that one should hold gold in a jurisdiction outside of where they actually reside. What exactly is so incomprehensible about my inquiry regarding how to actually access it when the time comes? To suggest that someone should have to fly from their home in the States to some distant location just to reach their "buried" gold whenever they need it—it’s nothing short of absurd!

Look, I realize you can keep him at arm's length without anyone even noticing—but that wasn't exactly the point of my question, was it?

Amanda Allen4 said:What kind of answer is that supposed to be to my question?

Let me repeat myself—how does one actually hold physical gold outside of the banking system, specifically in a jurisdiction other than where they reside, and how do you go about accessing it when the need arises?

Do you know, or do you not? I am asking because I don't have the answer.

Let me reiterate my point. It’s unlikely a bank would seize a tiny amount of gold or silver just to tank their long-term reputation. I understand people like Egon von Greyerz and Mike—they can't afford to get "notified" whenever things go south...
But did you see how the article started? All that "FAKE WIZARDRY" nonsense. You can extrapolate from there how bankers might behave, both in the short term and long term. For instance... one could argue they'll eventually claim your assets are sitting in the bank. At that point, try building any capital...

Amanda Allen4 said:My question concerns the advice given by Egon von Greyerz—specifically his suggestion that one should hold gold in a jurisdiction outside of where they actually reside. What exactly is so incomprehensible about my inquiry regarding how to actually access it when the time comes? To suggest that someone should have to fly from their home in the States to some distant location just to reach their "buried" gold whenever they need it—it’s nothing short of absurd!

Look, I realize you can keep him at arm's length without anyone even noticing—but that wasn't exactly the point of my question, was it?

I think people are mixing up two completely different things here. You’ve got the "regular Joe" version of gold—the kind of stuff tucked away in a drawer or a home safe, maybe a couple ounces or ten if they're lucky—and then you have the massive institutional gold held by some billionaire or a giant hedge fund. The idea that an individual needs to stash their gold outside of the country is just pure nonsense to me—it’s honestly pretty idiotic when you think about it. If you move it offshore, how the hell are you supposed to bring it back in? You’re basically just making it impossible to ever actually hold your assets again.

Let’s be perfectly clear: the pivot is likely happening right this second. This is an obvious window for capital formation.
The Western establishment isn't going to sit by and let itself be threatened for much longer—the motive is plain to see. That said, I expect silver to at least double by year-end and finally prove its monetary worth.
Based on a photo in Saturday's The New York Post, I’d venture to say a banking maneuver is underway, titled...

"Crazy John"

Amanda Allen4 said:My question concerns the advice given by Egon von Greyerz—specifically his suggestion that one should hold gold in a jurisdiction outside of where they actually reside. What exactly is so incomprehensible about my inquiry regarding how to actually access it when the time comes? To suggest that someone should have to fly from their home in the States to some distant location just to reach their "buried" gold whenever they need it—it’s nothing short of absurd!

Look, I realize you can keep him at arm's length without anyone even noticing—but that wasn't exactly the point of my question, was it?

You already know the answer.
Neither the advice nor the question actually makes any sense.

What’s your take on the future of gold?

Melissa Sanchez17 said:I think people are mixing up two completely different things here. You’ve got the "regular Joe" version of gold—the kind of stuff tucked away in a drawer or a home safe, maybe a couple ounces or ten if they're lucky—and then you have the massive institutional gold held by some billionaire or a giant hedge fund. The idea that an individual needs to stash their gold outside of the country is just pure nonsense to me—it’s honestly pretty idiotic when you think about it. If you move it offshore, how the hell are you supposed to bring it back in? You’re basically just making it impossible to ever actually hold your assets again.

Look, I am nowhere near being some high-net-worth individual, but I do hold gold that seems to follow the exact playbook laid out by Egon von Greyerz: it is held outside my local jurisdiction, it exists in physical form, and it remains entirely decoupled from the banking system. Specifically, my holdings are secured in Loomis vaults located in the UK and Switzerland.

So, no, it isn't sitting under my floorboards. Is that clear enough for everyone?

analogwolf10 said:What’s your take on the future of gold?

It hasn't changed for five thousand years.

Gold is solid money—it actually holds its value unlike fiat—but let’s be realistic: it isn't a state currency. That means (for now) you still have to convert it, just like you would with Bitcoin (our "digital gold"), if you actually want to buy anything.

Sure, there’s a transaction cost, and its value fluctuates when measured against some government-issued cash—but isn't that an infinitely smaller risk than holding money that is systematically losing purchasing power by the day? Or worse, facing the danger of it vanishing entirely? This isn't exactly uncharted territory, is it? 😁.)

For those who haven't done their homework: https://medium.com/@brettking/why-mo...g-6cff3f9ebd9d