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March 14, 2008



You've now filled your PSA requirements for the day. But they [goldbugs] are rabid, and unlikely heed your advice until AFTER it cools off.

But in principle, it's finally something I can reasonably agree with you on.

peter richardson

I use two different models. 1: Gold extraction costs driven by US CPI and
adjusted for gold price / ore quality
tradeoff (rising gold price leads to
higher cost production of lower quality
ore > lower production > supports price.
And 2: Econometric formula of Fed. Bank
Credit + oil price + JOC industrial
commodities composite... Both have gold
reasonable at around $600 oz. I have gold
price in bubble mode now.

Fabian Tassano

I agree that short term, headline enthusiasm for gold is a contrary indicator. "Fund managers say investors will flock ..." = "Smart money wants dumb money to chase it so they can sell a little higher".

Longer term, the decline-of-fiat-money argument is worth considering. "Gold bugdom" or "bugness", surely? I don't consider myself a gold bug, but the arguments the GBs have been making for years seem to have a ring of truth these days.

BTW, I'm not sure there's much evidence for the idea that gold has been rising because of equity weakness.


The last time gold spiked all those years ago, it only took a very short time for the largest holders of physical gold ( ie Indian women) to start cashing it in and driving the price back down

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