Even the mainstream is confused why gold is dropping

[benjamen]

http://money.msn.com/investing/why-gold-wont-stay-down

"Fundamentally, there couldn't be a better time to own gold and silver. But technically, the shiny stuff has just been hammered, inexplicably suffering a 1987-style plunge last month. Did a hedge fund blow up? Are policymakers pushing on prices to keep inflation expectations down? Are computer trading algorithms causing problems? We just don't know."

"The four largest central banks are abusing their currencies as fast as they can, with Japan going for broke with the "cheap money will save us" meme..."

"When the world is being flooded with cheap money, Economics 101 tells you the prices of all tangible assets -- including gold and silver -- will eventually increase."

"...after accounting for inflation, money isn't just free right now; people are paying you to borrow it (as long as you're a big bank borrowing from another big bank)."

 

[ancona]

What the MSM is missing would be the fact that our own central bank is supplying unlimited free money to the likes of JPM, et. al., and they are turning around and using some of it to ramp stocks and punk metals.

 

[Aubuy]

Watch the small banks. With the new Dodd Frank regulations they can't lend to their usual small business and home loan customers like they used to. Requirements are much stricter. Washington decides who you can loan to now, so income from loans is dropping. Also, just about everyone who could has now refinanced at much lower rates. With their cash deposits on hand all they can do is buy treasuries which pay next to nothing. If they take risk with that money in the markets....hmmm is that even possible?....they can lose depositors money and go broke. It's all bad options for them right now.

 

[pmbug]

Ladies and gentlemen of this supposed jury, it does not make sense!

 

[Unobtanium]

http://money.msn.com/investing/why-gold-wont-stay-down

"When the world is being flooded with cheap money, Economics 101 tells you the prices of all tangible assets -- including gold and silver -- will eventually increase."

The velocity of money is lower now than anytime in the past 60 years:

http://www.hightoweradvisors.com/wh...loads/2013/04/velocity-of-money1-1024x405.png

 

[DSAbug]

The velocity of money is lower now than anytime in the past 60 years:

And we still having rising prices for 12+ years in the gold market.

So either the measurement of velocity of money is being manipulated or it's being overwhelmed by money printing. I don't know about you but I don't see lower prices for almost anything. Especially when you look at the trends in prices over periods longer than a couple years.

 

[mmerlinn]

Even the mainstream is confused why gold is dropping

The mainstream media is confused about EVERYTHING, so what else is new?

If you go opposite of the mainstream media, you will be correct over 90% of the time. And it does not matter what the issue is whether social, economic, international, religious, political, or whatever.

 

[Unobtanium]

And we still having rising prices for 12+ years in the gold market.

So either the measurement of velocity of money is being manipulated or it's being overwhelmed by money printing. I don't know about you but I don't see lower prices for almost anything. Especially when you look at the trends in prices over periods longer than a couple years.

I see where you are coming from, but lower velocity does not necessarily mean lower prices. It just means lower rate of increase of prices. If all of the printed trillions in the past few years had a higher velocity, I think we would be seeing MUCH higher prices of everything, including gold. In fact, if we divide the money supply by the ounces of above-ground gold, I think the number comes up to be nearly $15k per ounce. So in a sense the low velocity of money is having a suppression effect the true price of gold priced in USD. There are many other factors in play, such as price manipulation by the paper gold markets.

 

[Aubuy]

I don't know about you but I don't see lower prices for almost anything. Especially when you look at the trends in prices over periods longer than a couple years.

Medical costs are skyrocketing. I think that will really get the ball rolling on inflation soon. Can't hide those numbers.

 

[ancona]

Auguy,
When Obamacare starts to suck 12 to 18 percent of nominal after tax salary out of middle class budgets each year, the devastation will reach around the whole planet.

 

[bushi]

The velocity of money is lower now than anytime in the past 60 years:

...something has to be done about that! Set the printers to ludicrous speed!

 

[CharlesMcLain]

Whoever seems confused at the gold dip, the gold hunters are making the best of this opportunity and stacking it up with the hope that it will bounce back and retain its top position as an investment.