GOLD 0.51% $1,391.7 gold futures

a question for gold bugs!, page-2

  1. 1,083 Posts.
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    I appreciate the points being made during this ongoing period of currency turmoil after the Global Financial Crisis.

    In the short term it is very complicated as to what are the money flows and whether the monies are in Euros or dollars. Rather than focusing on the short term during which dollar strength comes from extra demand for dollar as a medium of exchange rather than dollar as a store of value. We should focus on big picture.

    As an hypothetical example if people flock to gold they must go through euros or dollars to get there.

    Any decline in world trade creates less demand for Dollars. If USA increases GDP then demand for dollars increases.

    I prefer to think of the even bigger picture of the long term marginalisation of USA, EU & other western style countries. I understand the USA is being marginalized as British were prior to WWII. USA is shrinking in relative economic size and at present EU is much bigger in GDP & population. USA population is increasing. EU's population is declining. This marginalization by BRIC countries is enough to cause problems for dollar as there is a slow drift away from dollar for medium of exchange.

    I apologize for not addressing your specific questions.

    The middle east countries are already rumbling about using Euro as medium of exchange rather than dollar. So Dubai & Greece & Eire would be -ve to Euro which in a funny way is +ve for dollar.

    Depression & deflation is +ve for gold just as gold rose in great depression by President artificially revaluing gold in US dollars. So because during deflation banks collapse, so too gold rises in value when people realise cash is not such a safe haven.

    I like the stagflation scenario whereby as the west is marginalized the west just treads water by printing more dollars. The Asian nations have such "not so transparent/fair" legal systems that this will naturally scare people away from dollars into gold rather than Remnimbi or any other non democratic regime which will fiddle the books so to speak. Corruption etc etc.

    I apologize for being vague & succinct and I am happy to elaborate my views. My crystal ball doesn't come with a good history text book.

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