Cash For Gold
I don’t remember seeing any commercials for “Cash for Gold” programs until the economic collapse last fall. Having not put any thought into the matter, I casually assumed people were simply hurting for cash and more willing to sell their gold. While this is probably true, after seeing yet another gold selling scheme hit the airwaves it occurred to me there could be more going on here. Check out the price of gold over the past year:
Hmmm. I knew it was going up, but that’s pretty impressive. I’m starting to rethink selling my bling. Maybe I’ll hang onto it for a little while longer. At least until there’s a “Cash for Gold” commercial on every air break. Anyone out there who knows about the gold market? Is this trend sustainable?
Comment by Jacob Steelman on 3 November 2009:
The reason there are cash for gold programs is the demand for gold as the USdollar falls in value. People desire to get out of dollars and into another currency. For those distrustful of other government currencies they desire private currency – gold and othe precious metals. If the dollar increases in value and the price of gold in USD drops and continues to drop then gold will be sold and people will desire USD.
Comment by todd on 4 November 2009:
India just bought 200 metric tons from the IMF.“The fall in the U.S. dollar seems to be pushing all the central banks to strengthen their portfolio with gold,” said N.R. Bhanumurthy, professor at the National Institute of Public Finance and Policy in New Delhi. “Gold is a safe store of value compared to the U.S. dollar.” http://www.bloomberg.com/apps/news?pid=20601012&sid=al7qXOH.bVn8
Comment by Bill Green on 4 November 2009:
Check out kitco.com for lots of gold commentary. Though there is certainly difference of opinion, there are many who believe the trend will continue.
Comment by Andrew Daines on 5 November 2009:
http://www.inflation.us/nourielroubini.htmlHere‘s a good article as well. Gold is usually highly correlated with inflationary pressures.
Comment by David Johnson on 7 November 2009:
The problem is that gold is NOT money. Folks need to read more than a few blog posts in LvMI before they declare themselves economists. Remember when gold crashed a couple decades ago? Everywhere you turned “Austrians” were telling folks to buy gold… and then it crashed.Deja vu.
Comment by Jacob Steelman on 8 November 2009:
Well it sure as heck is fluctuating against other currencies as if it is money. Many central banks hold it as they would hold a currency in reserve. There is private e-gold which can be used to settle accounts. Yes it fluctuates but so does the US dollar, the euro, the AUD. Government mints manufacture and sell gold and silver coins. Even the establishment’s ruling elite group, The Council on Foreign Relations, has suggested the real possibiliy of gold becoming a private competing currency to the pieces of paper fiat currency being counterfeited everyday by the governments of the world. True it is not legally sanctioned by government as legal tender but then the government does not want competition from this superior private currency.
Comment by Niche Marketing Man on 18 November 2009:
Exactly what I was thinking, thanks for putting this forum together.
Comment by WDW on 3 January 2010:
Please define “sustainable” also tell me if you mean long or short term. Every time there is a significant trend in the financial realm someone tells us that this is a new para dyne. Phooey, this is just supply and demand from Econ 101.