Gold falls to lowest level in five years on dollar strength

I'm still buying. The fundamentals haven't changed. America has one-sixth of its people living below the poverty line, is massively deindustrialized, and still has growing debt and underfunded welfare programs. It won't end well for us Americans unless Draconian steps are taken.

There used to be a couple of gold bugs on this forum. They used to tell us with great confidence how Obama and Bernanke were debasing the dollar, and that my view that QE wouldn't turn the US dollar into "funny money" was utterly wrong because I don't understand how such things work.

They were apparently loading up on gold since the tsunami. But they've since dropped out of the forum, (although some of their ilk remain). Gee, I wonder wonder how their bet is working out?

That scenario didn’t pan out.

The correct phrasing would be "That scenario hasn't panned out."

It's near impossible to determine the timing on these things, but the dollar (along with most other manipulated and abused fiat currencies) is certainly going to crash at some point in the not too distant future. And I'm not a gold bug, partly because I assume most governments will implement draconian restrictions on gold transactions when their currencies fail.

Owning gold is a must for any portfolio. however the narrative of late has been negative. still, eventually all of these crazy policies will have an effect and we will see inflation and gold will have its moment. honestly, while I understand the "theory" of strong dollar/weak gold, fact is that dollar is only strong relative to a number of other currencies that are weak because ogf huge money priniting exercises (e.g. yen) or crappy economic prospects (e.g. Euro). If there were any sense to theory then gold should be strong relative to all of them. but looks like the bubble being blown by the money printing is in real estate and some other financial assets. If nothing else it is nice to occasionally take out my krugerrands and Maple Leafs and Kangaroos and little Mitsubishi Metals gold ingots - they are nice to touch and to look at (shades of Scrooge McDuck there)

I don't, have never, and have no immediate plans to acquire any physical gold, but if I did I'd be ditching my yen for it, rather than my US dollars.

The US isn't perfect, but when compared with Japan or the Euro-zone it looks relatively good. Still, the US Fed is yet to unwind their massive asset purchases, and depending on how that plays out sentiments could change.

Japan on the other hand looks positively screwed. The government can't even get a stadium built on time, and shows no fiscal discipline at all. The only reason to possess any yen is to transact in it, or to speculate on short term market fluctuations if one is into that, or as a hedge against unforeseen circumstances.

What has been happening in Greece recently is instructive though. People with money stuck in Greece had rushed to buy up real assets, such as cars etc. I don't recall reading about Greeks buying up gold. Of course some people are into it, but I'd hazard a guess that for most people there are better things to be in.

In Weimar Germany, people stocked up on cigarettes, as they were easily bartered, and a carton could be broken into single cigarettes to be traded for small purchases of food. In a currency collapse, I would want something that I could break up into smaller units, was widely accepted in barter, and unlikely to be targeted by the government. A shed full of coffee would probably be more useful than a couple gold bricks.

Why do you think money is called a "note" as it was once connected to the gold standard and the paper was a "note/receipt for said gold. Now the gold standard is long gone and inflation is still increasing.

Inflation is nothing more than the interest paid to (private) central banks for loaning the money to the government . who remembers when a can on soda cost.......

President Thomas Jefferson once said.

"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered...I believe that banking institutions are more dangerous to our liberties than standing armies... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."

Once it became clear that banks were not going to have to take their loses and deposits would not vanish (as is supposed to happen in capitalism) the reason for holding gold, as weak as it was disappeared. Now the market is driven solely by the endless propaganda campaigns shouting "hyperinflation", " Zimbabwe", and "Weimar" designed to separate the marks from their "worthless fiat currency". Perhaps the gold pushers are just running out of marks.

The great majority of investors and speculators today believe that gold is going to face relentless selling as rates rise.

... as rates rise, but that probably must be coupled with sustained low levels of reported inflation.

Still, if one currency suffers from high inflation, I personally don't see that as a reason to buy gold. You could just buy a more stable, well managed currency instead. After all, the Zimbabwean dollar failed, but it didn't mean all the rest of the fiat currencies did too.

A great time to buy physical gold and silver . Supplies are low, but premiums are high.

The reason to buy gold is because the US is financially ran like a third-world country. Eventually the US will have to enter some type of austerity or bankruptcy.