Gold Price Since 2001

Discussion of the Gold portion of the Permanent Portfolio

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barrett
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Gold Price Since 2001

Post by barrett » Wed Oct 29, 2014 5:50 pm

There must have been a thread or three about this already but I haven't seen anything yet...

Absent dramatic inflation here in the US in the last 30 plus years, why did gold go so high in the period between 2001 & 2012? Loss of confidence in the US Dollar? Inflation outside of the US? Jim Rickards secretly buying up large amounts on the sly? None of the above? Thanks.
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Xan
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Re: Gold Price Since 2001

Post by Xan » Wed Oct 29, 2014 6:05 pm

I believe the theory that's most popular around here is that it was a result of decreasing real interest rates.  But somebody smarter than I might have to come explain it in more detail.
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doodle
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Re: Gold Price Since 2001

Post by doodle » Wed Oct 29, 2014 9:37 pm

What I want to know is whether we already have hit the end golds bull run.....I hate the stuff and have to hold my nose to buy which makes me think there is probably some future potential
All of humanity's problems stem from man's inability to sit quietly in a room alone. - Blaise Pascal
HB Reader
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Re: Gold Price Since 2001

Post by HB Reader » Thu Oct 30, 2014 7:54 pm

barrett wrote: There must have been a thread or three about this already but I haven't seen anything yet...

Absent dramatic inflation here in the US in the last 30 plus years, why did gold go so high in the period between 2001 & 2012? Loss of confidence in the US Dollar? Inflation outside of the US? Jim Rickards secretly buying up large amounts on the sly? None of the above? Thanks.
barret --

FWIW -- I posted something relating to this question in late January of this year in a thread entitled "Gold and Inflation."

 
barrett
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Re: Gold Price Since 2001

Post by barrett » Fri Oct 31, 2014 7:24 am

HB Reader,

Thanks for reminding me of that. Your post was excellent and here is a link to that thread:

http://gyroscopicinvesting.com/forum/go ... inflation/

In that one Tiburon was essentially asking the same question I am asking.

Still thinking this through. I am familiar with the negative-real-rates argument for higher gold prices.
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Re: Gold Price Since 2001

Post by LC475 » Tue Nov 11, 2014 10:36 am

I think that nobody really knows.  I certainly don't.  Sometimes an asset will do well at times other than the economic state it is linked to -- but you can't count on that.  Gold should always do well in a period of high inflation.  Other times?  It might go up, or it might go down. 

Likewise, stocks should always do well in a period of prosperity.  During other times they might do well too, but you can't count on that.
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