RE: Much Ado About NothingWere getting some really interesting post here. Thing&concept - all of your points are pretty well bang on except for the gold part. Here's my very simplistic take on gold which could be way off but we won't know either way until the economy unfolds.
80% of gold is consumed by jewelry/indusrial dental and 20% by retailinvestors and exchange traded gold funds. The talking heads say that thedemand is outstripping the supply so in theory just on this alone the price should increase. Now on to more reasons why gold is hot in my books.
The latest disaster was caused by the wall street boys. - those greedy little buggers. Lots of reputable banks went under and lots of people lost money in the bank ( people that can afford it are buying physical gold to prevent this from happening again if they can affort it as Miningthemarket has pointed out) plus their houses and jobs. Basically lots of peoples personal wealth either disappeared or else dropped dramatically depend on the situation. I would say that the majority of it was in the US. When the US sneezes Canada gets a cold so obviously Canada got hit due to that plus the rest of the world took a hit.
So now the governments are trying to get the economies back up to speed by spending money. Since lots of people aren't working. The government isn't getting enough taxes to cover their spending so they crank up the printing press. Once that happens, the currency of that country gets devalued.
Investors generally buy gold as a hedge or safe haven against any economic, political, social or
currency-based crises.
The name of the game here is to conserve your wealth and try to increase it. As long as people buy into the fact that the government is printing lots of money and gold is stable and has a chance to increase in value over time ( Investors sentiment) then the person like myself are very interested in owning it.
Gold once tracked oil prices but now they have decoupled. Gold broke new all time highs and if your a chart guy then you like that.
On the down side, I truly believe those walls street boys- those greedy little buggers - can control the price to a certain extent and this magnifies the swings but this is JMHO.
Long & strong -> glass still half full
MM