interesting theory on gold and silver futures - Page 2

Originally Posted by rbrooks715

the notion that the value of the dollar changes the debt amount is false. the cola and roi are the problems and the answer.

True, the value of the dollar doesn't change the debt but 2 large factors that devalue the dollar are 1.) Printing more dollars, whilst this doesnt directly affect the debt, you just made some more money to pay the debt off, now with devalued dollars. 2.) Lowering interest rates so that the interest on the debt is lower. This directly affects the dollar as less people buy is because they get so little interest on it.
Only problem is, everyone else is doing the same so noone knows where to put their money at the moment. Everyone is in a rush to devalue their currency to stay competetive and so they pay less interest on their quite substantial debts.
Gold inversely follows the value of the dollar but it even more closely tracks interest rates, and with the UK, US and Euro not planning to increase rates 'till at least 2013 I am of the belief it is unlikely to drop it's trend any time soon. At least until interest rates are above inflation. Doesnt mean it won't go down, but gold could drop to 1300 and still be in a bull market.

It's a slow day in the small town of Pumphandle and the streets are
>deserted. Times are tough, everybody is in debt, and everybody is
>living on credit.
>
>A tourist visiting the area drives through town, stops at the motel,
>and lays a $100 bill on the desk saying he wants to inspect the rooms
>upstairs to pick one for the night.
>
>As soon as he walks upstairs, the motel owner grabs the bill and runs
>next door to pay his debt to the butcher.
>
>(Stay with this.....and pay attention)
>
>
>The butcher takes the $100 and runs down the street to retire his debt
>to the pig farmer.
>
>The pig farmer takes the $100 and heads off to pay his bill to his
>supplier, the Co-op.
>
>The guy at the Co-op takes the $100 and runs to pay his debt to the
>local prostitute, who has also been facing hard times and has had to
>offer her "services" on credit.
>
>The hooker rushes to the hotel and pays off her room bill with the hotel Owner.
>
>(Almost done...keep reading)
>
>The hotel proprietor then places the $100 back on the counter so the
>traveler will not suspect anything.
>
>At that moment the traveler comes down the stairs, states that the
>rooms are not satisfactory, picks up the $100 bill andleaves.
>
>No one produced anything. No one earned anything. However, the whole
>town now thinks that they are out of debt and there is a false
>atmosphere of optimism and glee.
>And that, my friends, is how a "stimulus package" works!



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Two kids decide to make a Lemonade stand.

They get the lemons & sugar & water & jug & cups & make a wooden stand & sign.
They decide on a price of 10 cents a glass.

So they are carting all this down to the corner & one gets thirsty, so he say's
"I will buy a glass of lemonade" & gives his 10 cents to the other kid.

A little later the other kid gets thirsty & gives his 10 cents to the first kid & gets a glass of lemonade.
This keeps happening until theres no lemonade left.

They then return home & count up their profit, they both get 5 cents each...
-----------------

Dunno where I was going with this story but I heard it a long time ago & this thread reminded me of it.

First let me introduce myself, I am new to the forum but not new to the precious metals market. I work at a coin shop that deals heavily in precious metals all day long. Everything from junk US 90% Silver to American Gold Eagles.

With the precious metals market there are so many factors that affect its outcome. From someone farting in Dubai and making gold go up by $20 to Saving some endangered leaf on an Alaskan Oil Pipeline. Anyways seriously:

Right now the European Market is a big factor in the precious metals market. In the US the fact that we have just had an economic stimulus in this country called the Holiday shopping season also teamed up with infamous tax return time is causing a serious decline in precious metals. If the dollar and DOW are weak precious metals are always strong. Well a stimulated economy has weakened the metals. Lets fast forward to late February to early March. Our unemployment rate in this country is a reported 8.7% last time I cared to look. That number is the biggest crock I have ever seen, it doesn't even begin to account for the people that are exhausted with trying to find work or are no longer eligible for benefits. Well the war is over the troops are all coming home and guess what some are reservists returning back to the workforce, so the replacement help will be let go. More jobs lost. The military doesn't need all the personnel now "No Longer Wartime" Most of the soldiers have done their tours more than a few times and no longer want to be in. So unemployment will go through the roof, the economy will suck worse and precious metals will be going strong again.
Sorry not trying to rant and rave.....
In my humble opinion you will never see a day when gold goes below 1400.00 again let alone 1000-1200 range. If you look at silver it definitely has the most growth potential of all the precious metals. Historical high for silver 55.00 in the 80's 48.00 about three months ago. Someday a good majority of Americans will come to the realization that what we have stuffed in safes and wallets is just paper. With billions and billions of un-backed funds our economy is heading for a steady decline if not a downward spiral. My favorite phrase that I hear people say is I hope silver goes up to 100.00 an ounce. No you really don't cause that means that the cost of living just went up ten fold and our nations economy has just crashed.
OK I'll get off my soapbox now but the view was spectacular up here.....
Thanks for reading!!!!

great post.

the sad part, is the folks who have been elected to lead us out of this mess act like 5 year olds. petty bickering over lowering taxes to the wealthiest, abortions and gay marriages. regardless of one's personal opinion on those issues, they will not produce one job nor lower the debt by a single dollar.

i do agree with your assessment of the gold market.

I find it interesting to read this post now, four and a half years later. What has changed?

The price of gold then about $1700 an ounce >> today less than $1200
Labor participation rate is the lowest since 1977
National debt has increased by a few trillion more dollars
Price of oil is lower. Then it was $94, today about $57 a barrel
Interest rates still near zero. The only ones making any real money are the bankers.

Once again, we are the verge of National financial disaster.
Hmmm, who will lose the most this time around?