A higher inflation? Count on it.
You've heard the saying: "You do not make 'em as before? Well, they are not loaded, as they previously did not. Nobody does. Try buying a loaf of bread for 50 ¢. Or a gallon of gas for $ 1.25. Nothing costs the same as in 1980. Nothing.
Except maybe gold.
This small anomaly has caused many analysts still too rigid in space. Not only gold will head higher still, for which they are set, you can from everywhere you look. And,really, this is an understatement. It is probably true to say that they are everywhere you look in its most extreme forms.
But as impressive as the gold was Taurus, the price remains in the days of disco and Jimmy Carter put
Getting even more rare gold
Has something happened to change the dynamics of gold in the last 27 years? There is a huge find gold? Some Valdez pipeline of precious metals, the gold as common as, well, oil? Uh uh. On theContrary, actually.
The production is not merely come to a halt, "it was rolling backwards. The South African gold industry, for which only a precious metals producer, looks like it is running from bullets. Back in 1970, 70 percent of its gold reserves in the world came from this country. With the 21th century, but SA production had shrunk to a mere 14.5 percent of world production.
South Africa is not alone. "After a peak in 2001 has prevented the world's gold production steadily slipping. One reason for theLack of new supply, it is to have been no major discoveries of gold in a time, times and certainly not on the scale in the 80s and 90s. For the few discoveries have been made, the necessary time to develop and extend their deposits extract from four to seven years, "wrote Bernard Baumohl, Time magazine senior business reporter.
Do not count decrease to higher gold prices, that four to seven years, delaying any time, either. Pierre Lassonde, president of Newmont Mining,the world's largest gold mining company, gave this remarkable quote: "When gold takes $ 1,000 per ounce, is four to seven years to open a mine."
This means that gold prices are still in this strange period 1979-1980, remained as Michael J. Fox in Back to the future.
Gold at an "inflation-adjusted" $ 2176
"In terms of today's dollars, gold reached $ 2176 in 1980."
The surprising observation by Larry Edelson of Weiss Research, and what he means here thatGold is undervalued, not only at $ 700 + price today, it's stealing a.
Edelson continues: "Even if it would reach only half of the inflation-adjusted price, then the yellow metal to increase to more than $ 1000 per ounce."
What would you steal from each investor's standard is still far too. Edelson's premise is that gold would have "more than tripled, just about the same purchasing power it was back 26 years ago!"
The funny thing is, is gold is the ultimate inflation barometer.The price should be honest and tell us, from generation to generation, as has become ridiculously inflated the dollar. So what happened? Which brings us to tell us the precious metal from the cold, hard truth? That's a good question. Whatever the answer, regardless of harm to the central banks to manipulate the precious metal will soon pave the way for the irrepressible pressure was building.
As Mount St. Helens in 1980 is back, gold will eventuallyready to blow up the air.
An avalanche of inflation on the way
Back in 1980, was the price of the average new car only $ 7609th According to Car and Driver magazine, the average cost is now something like $ 27,800. This is a 265 percent increase, nearly ten percent of the "real" inflation a year in the last 27 years, a statistic will reflect the prices of many consumer goods.
But you do not need an analyst to know that the real world, inflation has littleresemblance to the government's official annual rate of 3.5 percent.
All you have to be is an adult who spends money.
Even so, even as bad as it's been over those 27 years, it looks a whole lot scarier up ahead - especially with oil, the common denominator in our economy, staring at $100 a barrel. As it is, crude oil has quadrupled in about five years time...and some analysts are even pegging it at $150 a barrel by mid-08.
Only once before has a recession failed to follow a dramatic jump in the price of oil. And for some reason, as crazy as the current jump in oil prices remains, it is doubtful we are about to make a second exception to the rule.
You've heard the saying: "A rising tide lifts all boats"? Well, economically speaking, there is the rising oil prices all. And to the extent that the current rise in oil prices, expect that consumer prices, we come face to face with each passing day rise exponentially.
Why gold will eventuallySnap
Analyst Christopher Laird compares Gold with the saturation line of fracture. He said: "Gold has an elastic effect on the recapture of the value ... it wallow in the low to a snap effect occurs."
Good analogy. The earthquake, Snap is currently overdue at about quarter century. And if you think, now $ 700-ish price of gold is about as high as gold is received, you have already forgotten the middle part of this article. This is the part that says, has just returned to his triple gold1980 purchasing power - the kind of deep snap, that can finally make things right.
There is even a basis for predicting such a gold snap, and it goes roughly like this:
Four separate times from 1974 to 1980, you could have predicted that rising gold price, by itself, what did oil. It was a consequence of rising to it would be - first oil, then inflation, then interest, then gold. It was a very predictable freight train, and it was done four different timesmore than six years, which culminated in gold $ 850 in 1980.
Today, with gas well above $ 3.00 per gallon, the same freight train has already left the station. And just as with the 1974/1980 cycle, you can create a higher inflation will soon follow today peak oil, then put somewhere on the road, have higher interest rates, the higher will be gold.
And this time it was enough to actually hit by a frustration factor for gold in his honest-to-Gosh, real-time,"adjusted-for-inflation" price.
You'll probably want to be a gold owner before this higher inflation takes hold.
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