Comments on: The gold price tells us nothing about inflation http://blogs.reuters.com/felix-salmon/2012/04/05/the-gold-price-tells-us-nothing-about-inflation/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: safiya http://blogs.reuters.com/felix-salmon/2012/04/05/the-gold-price-tells-us-nothing-about-inflation/comment-page-1/#comment-38566 Wed, 02 May 2012 06:32:39 +0000 http://blogs.reuters.com/felix-salmon/?p=13004#comment-38566 Thanks……. Have a look on
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By: safiya http://blogs.reuters.com/felix-salmon/2012/04/05/the-gold-price-tells-us-nothing-about-inflation/comment-page-1/#comment-38565 Wed, 02 May 2012 06:30:53 +0000 http://blogs.reuters.com/felix-salmon/?p=13004#comment-38565 Its really very helpful and useful tips,i got more information by reading this article,many thanks for sharing this……….

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By: TFF http://blogs.reuters.com/felix-salmon/2012/04/05/the-gold-price-tells-us-nothing-about-inflation/comment-page-1/#comment-37691 Sat, 07 Apr 2012 23:57:50 +0000 http://blogs.reuters.com/felix-salmon/?p=13004#comment-37691 @ckbryant, on one level what you say is obviously correct. But on another level, people are investing a greater percentage of their assets in gold than before. Do you have a better way to describe this?

@Mjturner, that “riskless profit” is only a profit if a dollar tomorrow is worth the same as a dollar today.

But I agree that there is no evidence that the markets are anticipating rapid inflation — at least not as measured by the Treasury/TIPS spread.

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By: mjturner http://blogs.reuters.com/felix-salmon/2012/04/05/the-gold-price-tells-us-nothing-about-inflation/comment-page-1/#comment-37669 Fri, 06 Apr 2012 19:26:07 +0000 http://blogs.reuters.com/felix-salmon/?p=13004#comment-37669 djiddish98 – think it through. If the gold futures price was double the spot price, you could easily sell gold forward, buy spot gold, store it in a vault at a cost of less than 0.5% pa, and wait until the delivery date and make a riskless profit. So the spot price is, essentially, the futures price.

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By: ckbryant http://blogs.reuters.com/felix-salmon/2012/04/05/the-gold-price-tells-us-nothing-about-inflation/comment-page-1/#comment-37664 Fri, 06 Apr 2012 18:42:05 +0000 http://blogs.reuters.com/felix-salmon/?p=13004#comment-37664 “Gold prices have risen because more money has flowed into that asset than has been removed from it.”

EXACTLY as much money has flowed out of gold as has flowed into it. Always. Full stop. Let’s get the accounting identities right as a first step, yeah?

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By: sewells1951 http://blogs.reuters.com/felix-salmon/2012/04/05/the-gold-price-tells-us-nothing-about-inflation/comment-page-1/#comment-37658 Fri, 06 Apr 2012 17:07:10 +0000 http://blogs.reuters.com/felix-salmon/?p=13004#comment-37658 And, it could be that the sovereign debt loads in the western world concern many the folk who are invested in sovereign debt are simply wrong, like the people, pensions, hedge funds and other financial institutions who invested in mortgages were. If that’s the case, then gold may be priced very much on the low side at present.

My point here is that I think people, all over the world, are increasing their exposure to gold as a hedge against the debt profligacy of the sovereigns. If it works out the way they think it might, they will be wrong right up until they aren’t, sort of like the folk who were shorting mortgage backed securities a few years ago were.

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By: EdwardCate http://blogs.reuters.com/felix-salmon/2012/04/05/the-gold-price-tells-us-nothing-about-inflation/comment-page-1/#comment-37628 Thu, 05 Apr 2012 16:11:55 +0000 http://blogs.reuters.com/felix-salmon/?p=13004#comment-37628 If one graduated from a university in the last 40 years, you may want to read “Crisis in Competence” published by the National Association of Scholars.

The “dollar value” of gold is how many piece of paper some figure they’d trade for an ounce. The “value” of holding gold is that there are no counter-party promise being relied upon, and that’s highly important during times when many high-level folks aren’t keeping their promises.

“I am more concerned with the return of my money than the return on my money.” Will Rogers, quoted in Will Rogers Performer, p. 292. Also attributed to Mark Twain.

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By: MrRFox http://blogs.reuters.com/felix-salmon/2012/04/05/the-gold-price-tells-us-nothing-about-inflation/comment-page-1/#comment-37626 Thu, 05 Apr 2012 14:34:37 +0000 http://blogs.reuters.com/felix-salmon/?p=13004#comment-37626 “Gold isn’t a store of value. It’s a shiny metal.
They are as much a store of value as tulips were during that mania.” (Posted by petertemplar)

Yes, gold’s worth is based purely on psychology, not utility in any economic sense; there’s inherent risk in that – and has been for the 3000+ years that gold has overcome that risk. Chances are it will continue to do so for at least another hundred years – who cares what happens after that?

Sometimes the obvious answer is the right one: the Treasury/gold anomaly isn’t really that at all – people and governments have fled to Treasuries out of, respectively, fear and lack of an alternative, and simultaneously to gold because of fear and greed. Fear influences investing like never before in my lifetime – and I’m not young.

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By: TFF http://blogs.reuters.com/felix-salmon/2012/04/05/the-gold-price-tells-us-nothing-about-inflation/comment-page-1/#comment-37625 Thu, 05 Apr 2012 13:54:13 +0000 http://blogs.reuters.com/felix-salmon/?p=13004#comment-37625 Felix, why are you comparing the PRICE of gold with the YIELD of bonds? Shouldn’t you compare price and price (assuming reinvestment of interest)? Or yield and yield?

Of course that latter would be pretty boring, since the yield on gold is zero (or negative)…

Real interest rates are very low (negative) right now, so those low bond yields may imply significant expected inflation.

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By: petertemplar http://blogs.reuters.com/felix-salmon/2012/04/05/the-gold-price-tells-us-nothing-about-inflation/comment-page-1/#comment-37624 Thu, 05 Apr 2012 13:54:05 +0000 http://blogs.reuters.com/felix-salmon/?p=13004#comment-37624 Gold isn’t a store of value. It’s a shiny metal.

They are as much a store of value as tulips were during that mania.

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