How high will gold go?

[Bottomfeeder 244]

And, how should we protect against hyperinflation?

http://www.youtube.com/watch?v=2RaIRxBpTt0&NR=1

http://www.youtube.com/watch?v=Ed4sv6ND5Qo&NR=1

http://www.youtube.com/watch?v=2_xU9yD6x-0&NR=1

Negative Fundamentals:

[LegalEagle 22]

It's down about $50 today.

Where's it going?

[Bottomfeeder 244]

I'd say $1200-$1500 short term, but long term $2000-$3000. Sentiment has been helped by the feds actions, but this is only temporary. When everyone relaizes what's happen, in that, the very wealthy are the only one's benefiting from lower rates then it will be too late for them. Actually it is too late. The middle class is screwed, they all just don't know it yet. Watch Glenn Beck nightly. He's all over this subject.

Unless someone finds another gold vein capable of dropping the price of gold due to a gold supply increase, then the price will continue to rise against the USD. Historically, gold prices rise proportional to inflation.

Two factors always influence the relative value of gold in any currency. The first is the increase in the amount of currency (inflation of dollars) and the second is the increase in the amount of gold (inflation of gold).

When the amount of dollars increases (inflation), the dollar loses buying power and that typically shows up as an increase in the prices of goods and services. It stands to reason that as the dollar is inflated, it also increases the price of gold, in dollars, even though gold's inherent worth (buying power) is not affected.

Similarly, if the amount of gold increases, the value of gold will decrease. Due to its physical properties almost all of the gold ever mined is still around in one form or another, which is one of the reasons why gold is so suitable to be money in the first place. The amount of gold mined on an annual basis is nothing other than inflation of the total amount of gold ever mined. The inflation rate of gold is thus new mine production as a percentage of above ground gold stock, which in turn is equal to the total amount of gold mined since the beginning of time.

Consequently, the change in the gold price, in dollars, over time will be in proportion to the inflation of the dollar and inversely proportional to the inflation of gold. We can calculate the theoretical gold price (Aun) as follows: Aun = Aun-1(M3n/M3n-1)(GPn-1/GPn) [Au = gold price; M3 = money supply; GP = gold production]

http://www.silverbearcafe.com/private/gold101.html

The formula is different now since the Feds no longer report the M3.

Glenn Beck has been talking about the pain of the little guy lately. People are hurting and there is nothing for the pain.

Bob, let me start with you. Forget about all this talk about Wall Street and everything else. The average person is having trouble with milk. They`re having a problem buying gas. They`re having a problem making their house payment. Seventy percent of our engine of our economy is run on us spending money. How do we pull ourself out of this hole if people don`t have money to spend?

BOB O`BRIEN, EDITOR, "BARRON`S" ONLINE: Well, Glenn, that`s a -- that`s a very thorny question that we`re trying to grapple with here. I mean, basically, everything that we`re trying to try and bail out the financial services business is something -- it`s one of these, you know, Main Street versus Wall Street initiatives. Everything you do to try and help Wall Street ends up rebounding and hurting Main Street.

I think that`s going to continue. I think the only message you can send to consumers out there is that they better be prepared for this to take a long time before it remedies itself.

http://transcripts.cnn.com/TRANSCRIPTS/0803/17/gb.01.html

It's going to get worse before it gets better. I'm completely out of USD dominated assets.

See http://www.europac.net/