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To: Tommaso who wrote (100403)2/12/2012 11:48:35 AM
From: TheSlowLane
of 108841
An analysis of coin sales is one way of approaching the question:

Demand is strong amongst the gold buying public but remains a fringe activity of store-of-value buyers rather than a mainstream phenomenon. At this stage few retail investors have any allocation to gold whatsoever and very few have even owned a gold coin or bar in their life.

This is slowly beginning to change with a small minority of retail investors beginning to diversify into gold in order to protect against systemic risk in the banking and financial sector (e.g., MF Global) and from the monetary risk of currency debasement.


...there is little in the way of ‘animal spirits’ in the gold market, with no signs of a gold mania or ‘gold rush’ whatsoever.

Given the state of the US and other advanced economies around the world since January, 2008, U.S. Mint data does not appear to support the view of a dramatic over-buying of gold by the fabled speculatively crazed retail investor that some media commentators are seeing nowadays.

The man and woman in the street in most western countries (except Germany, Austria and Switzerland) continues to be a more of a seller of gold (jewelry into scrap) than a buyer of gold, as seen in the Western world phenomenon, that is: ‘cash for gold.'

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To: Tommaso who wrote (100403)2/12/2012 2:50:18 PM
From: carranza2
of 108841
i like jim grant's definition of a bubble: a bull market in which the user of the word 'bubble' has not participated.

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To: Tommaso who wrote (100403)2/12/2012 3:05:59 PM
From: Amark$p
of 108841
His view of gold was that it had already done about all it could do and that it was too late to get in.

Tell your friend, if the US has stopped printing money (i.e. no more quantative easing), then yes it may be too late to get into gold...

But if your friend expects the US to continue to print more money, then gold is undervalued at current price.

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To: Amark$p who wrote (100406)2/12/2012 3:21:39 PM
From: dalroi
of 108841
perhaps intresting to know is are the investments of that friend good ? and did he go into gold 10 years ago

if no to both questions then its positive :-)

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To: carranza2 who wrote (100405)2/12/2012 4:23:44 PM
From: Tommaso
of 108841
>>>i like jim grant's definition of a bubble: a bull market in which the user of the word 'bubble' has not participated.<<<

I laugh every time I think of that. I started to add, "Thanks for tickling my funny bone" but realized that the innocent childhood expression will no longer do.

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To: Tommaso who wrote (100403)2/12/2012 9:13:35 PM
From: Follies
of 108841
Ask your friend if the federal deficit is about as high as its going to go. If they end up balancing the budget for 2012, then your friend may be right , gold could be at a peak.

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To: Tommaso who wrote (100408)2/12/2012 9:54:44 PM
From: MJ
of 108841
Somewhere on the internet is an article by Grant describing his first purchase of gold----believe it was Krugerrands-------that was about 1979. His description has that touch of humor.

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To: carranza2 who wrote (100405)2/12/2012 10:54:03 PM
From: benwood
of 108841
Very true. In a real bubble, and we've already seen several in the past 15 years, any murmurs of 'bubble' is quickly rationalized away by the masses, media, pundits, analysts, MSM, and the kid next door with excuses about why "this time it's different!"

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From: Alex2/13/2012 6:22:07 AM
of 108841
Is Gold Money?… Don't Ask Ben Bernanke, Examine the Federal Reserve
February 13, 2012
By Peter Krauth, Global Resources Specialist, Money Morning

If you really care about your financial future, here's something you need to know.

It's about a story that received almost zero coverage from the mainstream press. I can't say that I am surprised.

It involves gold.

Thanks to requests by Bloomberg News under the Freedom of Information Act, the Federal Reserve has revealed unprecedented details concerning the personal holdings of its regional bank presidents.

What they found is nothing short of stunning ...

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From: Alex2/14/2012 3:52:50 PM
of 108841

Fed Should Heed Lessons of 1920s: Grant By Cordell Eddings and Tom Keene | Bloomberg – 4 hours ago

The U.S. has been "overmedicated" by public policy and should consider the government's 1920's response to recession, said James Grant, editor of Grant's Interest Rate Observer.

Responding to a severe economic downturn from 1920 to 1921, the Federal Reserve increased interest rates and the national budget was balanced, moves that kept the painful recession short, New York-based Grant said. In contrast, he said U.S. policy makers are prolonging the pain of the so-called Great Recession by intervening in markets and running unprecedented federal budget deficits.

"The Fed is not content to let interest rates find their levels, they must repress them, and they are not content to let housing prices find their levels, they seek to intervene to prop them up," Grant said in a radio interview on "Bloomberg Surveillance" with Ken Prewitt and Tom Keene. "The results of all this intervention is not to cure what ails us, but prolongs the symptoms of what distresses us."

In January, the Fed extended its pledge to keep the target rate for overnight loan between banks near zero, as more than two years of economic growth have failed to push unemployment below 8.3 percent.

"Economic conditions -- including low rates of resource utilization and a subdued outlook for inflation over the medium run -- are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014," the Federal Open Market Committee said in a statement on Jan. 25.

Bernanke's Tolerance The decision bolstered speculation that Fed Chairman Ben S. Bernanke will tolerate faster gains in consumer prices. The Fed set an annual inflation target of 2 percent and policy makers suggested they may conduct a third round of bond purchases under a policy known as quantitative easing.

"What is discouraging about the Great Recession is that it seems not to end," Grant said. "The historical comparison is useful to invite us all to consider the present day orthodoxy and if it is possible that it is wrong. I think that it might be wrong."

The U.S. Treasury should begin to issue longer-dated bonds backed by gold and investors should also buy gold as it is "something substantial," Grant said. The bond bull market of the past 30 years has made investors complacent to the risk of owning bonds, he said.

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