NYT: Dollar's Fall Pushes Gold Above $450

[DeepModem Mom]

Dollar's Fall Pushes Gold Above $450
By ALAN COWELL

Published: November 26, 2004


LONDON, Nov. 25 - With the dollar hitting a third straight day of record lows against the euro on Thursday, gold rose above $450 an ounce for the first time in more than 16 years, driven by investors looking for an alternative to the American currency.

"Gold bulls should be dancing in the street," Barclays Capital said in an investment note. Gold, which is priced in dollars, has risen by about 13 percent in the past two months.

The newest high for the euro came in light European trading with American markets closed Thursday for the Thanksgiving holiday. The euro touched an all-time high of $1.3282 before settling back slightly.

Gold - a traditional safe haven in troubled markets - reached $452.75 in London trading before easing back to $450.15. It had closed a day earlier at $448.50. Thursday's peak was the highest for gold since June 1988.

Kamal Naqvi, a precious metals analyst with Barclays Capital, said investors might well push gold prices higher, toward $455 or $460, and other analysts suggested it could go a lot higher if the dollar weakens further....


http://www.nytimes.com/2004/11/26/business/26gold.html

[Coryoth]

1. Expect this to get worse

Pretty much all the major indicators are pointing to a significant slide for the US Dollar. Try this Economist article which has the former chairman of the US Federal Reserve predicting a 75% chance of a currency crisis in the next 5 years. Will be interesting to see how Bush handles that if it occurs.

[candy]

2. Scary stuff! n/t

[CHIMO]

3. From Where I Sit

I would say that the odds are more like 250 million to one that there will be a currency (paper) crisis.

[NinetySix]

4. I like those odds!

</Homer Simpson>

[The Zanti Regent]

10. Calling the PRESIDENTIAL PRAYER TEAM™

Time for you fools to pray the deficit away!

[The Night Owl]

15. The Prayer Corps

I could see Laura Bush coming up with some crap outfit like The Prayer Corps.

[Anarcho-Socialist]

17. He'll handle it by blaming it on "Bill Clinton", it's the Clintons fault!

Or he'll blame it on the Europeans for having a strong currency, well he'll blame someone because by his very nature he will never ever take responsibility for anything.

[NEOBuckeye]

18. Forget 5 Years. Try 5 Months.

Russia is aligning itself with the EU now. Many more countries are soon to follow. They are seeking to establish the Euro as the default reserve currency of the world. Very good for the EU. Very bad for the US.

[DeepModem Mom]

21. Welcome to DU, Coryoth, and thanks for the link --

[juliagoolia]

5. I've been saying for months the dollar will crash

Its going to be lose more than half of its value.

IMO.

gold is the thing to own. Any REAL property is the investment.

You can't go on with the nation in debt, all of its residents in debt, and a huge trade deficit and expect to stay solvent.

Have I said today how much I hate this Admin and its corp thugs!

"Gold bulls should be dancing in the street," Barclays Capital said in an investment note. Gold, which is priced in dollars, has risen by about 13 percent in the past two months."

"The euro touched an all-time high of $1.3282 "

And we are the what???? No longer the richest nation on the earth!

[UpInArms]

6. from the largest creditor nation

to the largest debtor nation -

12 years of RayGunomics and now a RayGun-on-steroids nimrod.

:nuke:

[ozymandius]

8. It is shocking.

Just look at those charts at Mises and the graph lines start to go nuts as of the year 2000.

[FloridaPat]

7. I think it is more than the dollar. Gold is also rising against the euro.

Anyone have an explanaiton for that???

[Maple]

12. In financially tense times

people just buy gold. No matter what their usual currency is.

[NVMojo]

9. the international gold mines in Nevada get their just reward for

handing Bush rural Nevada with the help of Rove. It is was it is. The sick part is the profit at this level is still coming from public lands and they are paying next to nothing for it.

[marzipanni]

25. Hmmm, and Bushco further subsidizes them with....

lax EPA control over dumping cyanide and creating a poisonous wasteland while they rape the our land.

[RebelYell]

11. We cashed in our 401k's for gold at $221

I think it's time to sell. But you can't buy groceries with gold. Now what?

[Zynx]

13. Gold is weird - it doesn't trade like most other investments.

I'm very hesitent to give unlicensed investment advice, but I would tend towards not dumping all of that gold anytime soon. It will bounce around, but will trend higher. Plus you bought in so low, you're safe. Gold is never going back down there unless we find a mountain made of it somewhere.

Gold is also a real asset, unlike stocks and such. As in if you had a block of it sitting on your piano, it would be worth what the market price for gold is.

Stocks, bonds and other paper are subject to asking price and getting price. What you see on the ticker is a composite of the asking and getting prices. This means in a panic, you may not be able to find a buyer.

I'm not a gold bug by any means, in fact I loath them on principle, but if the dollar continues to tank and the US continues to run its economy like a banana republic, gold is a very good investment.

[RebelYell]

14. Thanks, Zynx n/t

[RedCon1]

16. Historically, when gold prices rise,

governments take action to curb that rise. They sometimes sell off reserves to get the supply up or they will issue gold certificates to do the same. My understanding is that this is done to strengthen faith in paper money. People can get hurt in the precious metal game just like the stock game in this way. If you buy at $450/oz today and it drops to $250/oz tomorrow, I would say sit on what you got. IOW, once you buy gold boullion, don't even plan on selling it. Gold is about security, not returns. Bottom line: I wouldn't bet the farm on gold; however, I would keep a fair amount of it around for emergencies. If all else fails, you'll be able to use gold to buy your way out of the country.
Of course, I'm no economist. I have been researching this for a while though. Here's an intersting web-site that interested readers may find enlightening. http://www.the-privateer.com/gold.html

[teryang]

19. I agree with your advice but

...gold is not ever going back to 250. In fact, gold is still cheap at 450. I could see very high interest rates pushing back down to 285-295 minimum, but this is extremely unlikely. If it goes down that far, I would buy as much as I could reasonably afford and securely store.

[RedCon1]

23. I agree,

it would be very unlikely to see gold go that low again. $250 was just a poorly chosen arbitrary number to illustrate a point. Your numbers seem more reasonable. On the flip side of the investment, I have heard that gold will hit 4 figures before this is all over too. I think paper currency will have to start nose diving globally before that happens though. I think, currently, Americans are the only people really doubting their paper and looking to gold as a solution and that's preventing it from going too high right now.

[R Hickey]

20. Gold is about sercurity, not returns. Quite true.

I've been investing in land, but gold is better these days, the dollar, with Bush at the helm, looks like it will do what the German Mark did in the 1920's, or what Confederate currency did at the end of the Civil War.

I buy gold with the attitude of people buying insurance. Gold is an insurance policy against your currency becomming worthless.

[RedCon1]

24. "I buy gold with the attitude of people buying insurance."

An excellent analogy.

It's scary to think of our currency going the way of the Reich Mark though. That kind of inflation will have very painful consequences for us and the world. It can only lead to greater warfare. I am thinking that this is the "method to the madness" of our current administration. When the world is at war, America becomes an exporter again and that's good business.

[leesa]

22. Thank goodness the Bushes own that gold mine, eh?

I was worried for them!

[nebula]

26. How long before $5 a gallon at the pump becomes the norm?

its already at $5 a gallon in some parts of the country.

the dollar's worthlessness with chimp in office means price of everything we import skyrockets.

[FloridaPat]

27. The price of the dollar doesn't matter with oil. It's traded in dollars

So we get a break and so does the rest of the world. Except for the oil producers. They're loosing money against the euro. The price of oil is going up because they are loosing too much money and/or peak oil has reared it's ugly head and the writing is on the wall.

[alexisfree]

28. GOLD will ensure your success in the future.

When a loaf of bread is $2000.00 a loaf....and Gold manages to stay up with inflation then will see how much your thousands in the bank will be worth.

[struggle4progress]

29. All this investor confidence makes me giddy. eom

[American Tragedy]

30. I should have listened more closely to my aunt's millionaire ex-husband

Years ago, after Bush was inaugurated, he said that we should invest heavily in gold like he had.

[Tight_rope]

31. Damn...is the dollar still falling...shit how low can it go.

Shit...soon we will have to change the name from dollar to quarter, quarter to dime...dime to nickel and nickel to penny, which ain't worth shit.

[Name removed]

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