Scott knows I'm a gold bug and asked me the other day what I think of gold's decline.
I told him that back in March I said I was staying away from gold at that level because it was susceptible to price fluctuation along with other commodities, which were becoming overpriced. Lately gold has had a hard time because speculators are liquidating to cover margin calls, and because of a flight to "quality" - US Treasury bills.(?).
To reassure Scott and any other gold owners out there Peter Schiff, prognosticator extrordinaire,and Ron Paul's economic adviser has pointed out that at the stock market bottom in the depression the price of one ounce of gold was equal to the price of the Dow Jones Industrial Average, suggesting that the same thing could happen again. Where do you think the Dow and gold might converge in the next year or two? At three or four thosand? Sounds do-able to me.
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Yeah, I have a lot of confidence in gold over the next decade and beyond, it's just the dollar surge despite the 700 billion bailout that puzzles me a bit. I saw the interview with Schiff on Fast Money and he said 2000 an ounce next year is likely. That'd be right around 8 bucks a gallon for gas I suppose seeing as it was about 4 dollars when gold was at a grand.
Sounds like good times ahead.
Hi Scott,
Investing in dollars doesnt seem like a good idea to me either. T-bills are just a place where big money can be parked while people try to figure out what to do next.
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