LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

GoldSeek.com to Launch New Website
By: GoldSeek.com

Is Gold Price Action Warning Of Imminent Monetary Collapse Part 2?
By: Hubert Moolman

Gold and Silver Are Just Getting Started
By: Frank Holmes, US Funds

Silver Makes High Wave Candle at Target – Here’s What to Expect…
By: Clive Maund

Gold Blows Through Upside Resistance - The Chase Is On
By: Avi Gilburt

U.S. Mint To Reduce Gold & Silver Eagle Production Over The Next 12-18 Months
By: Steve St. Angelo, SRSrocco Report

Gold's sharp rise throws Financial Times into an erroneous sulk
By: Chris Powell, GATA

Precious Metals Update Video: Gold's unusual strength
By: Ira Epstein

Asian Metals Market Update: July-29-2020
By: Chintan Karnani, Insignia Consultants

Gold's rise is a 'mystery' because journalism always fails to pursue it
By: Chris Powell, GATA

 
Search

GoldSeek Web

 
A Musing on Gold and Fiat Currencies



-- Posted Monday, 29 October 2012 | | Disqus

A Monday Morning Musing from Mickey the Mercenary Geologist

 

Gold is money that maintains its purchasing power, and for this reason it should be viewed as insurance against financial calamity and a hedge in case of economic collapse.

 

When money supplies are inflated, fiat currencies are devalued and the price of gold goes up. For example, monopoly money manipulators Bernanke and Draghi announced the purchase of more tranches of American and European debt in late August and early September and gold rose $127 an ounce in a two-week period:

During the previous six months, it had been widely anticipated that Professor Bernanke planned to engage in this third round of quantitative easing. In the various instances when he did not, gold precipitously dropped $50 or more immediately after his speech.

 

Despite mainstream media‘s promulgation of the idea, gold's inexorable increase in price does not represent a bubble. The gold price has steadily increased in every major currency over the last 11 years, and it is now all but certain the metal will end 2012 higher than it was at year’s end 2011. Precious metals pundits have predicted this performance for several years now; it seems a veritable no-brainer.

By comparison, examine what happened with the price of silver in the late winter to mid-spring of 2011; it rose from less than $27 to nearly $50 an ounce and then immediately collapsed in a parabolic fall to $32 and change. This is precisely how speculative market bubbles work: 

Although silver has traded below $30 most of 2012, it is now at $32 in the aftermath of QE3. Silver is not money; it is more industrial than precious metal.

 

We have not seen this sort of volatility in the gold market since late 1979 to early 1980. In the course of five and a half months it went from $282 to $850 an ounce and in a classic parabolic fall, was at $482 two months later. It took nearly 28 years to reach that lofty level again.  

 

As for the bevy of gold bug speculators currently predicting that gold will reach $2,500 an ounce by the end of the year, I can foresee no catalyst to stimulate such an exponential rise.

 

Regarding their mid-term ideas of gold breaching $5,000, $10,000 or even $15,000 an ounce, I would opine that if it were to reach those levels within the next few years, you should own not only gold but a gaggle of guns and an arsenal of ammo because the world would be in total economic and social collapse.

 

No matter what price of gold bullion retailers, newsletter writers, radio pundits, and TV talking heads with vested interests may promote, please note that financial success with their respective buyers, subscribers, listeners, and viewers depends on sustaining an emotional environment of greed, fear, and panic. Some of the older perma-bulls in this crowd have been predicting an imminent collapse of the world’s financial system since the late 1970s and early 1980s. This Chicken Little notion reminds me of the multitude of born-again doomsday prophets predicting the end of the world, a la Monty Python’s “Life of Brian”.

 

Personally, I prefer the Boy Scout way and am hopefully prepared for whatever may come; i.e., I hold a minimum of 10 per cent of my net assets in physical gold in my physical possession at any given time.

 

For me, gold is neither an investment nor a speculation. I do not trade gold; I hoard gold. Gold is my insurance policy against financial calamity and my hedge against economic collapse.

 

I think that every smart investor should have a portion of his net assets in physical gold. Gold is money. Everything else is just a constantly devaluing piece of fiat paper or a keyboard stroke that is deemed by one insolvent government or another to be money.

 

May you own gold, live long, and prosper.

 

Ciao for now,

 

Mickey Fulp

Mercenary Geologist

 

The Mercenary Geologist Michael S. “Mickey” Fulp is a Certified Professional Geologist with a B.Sc. Earth Sciences with honor from the University of Tulsa, and M.Sc. Geology from the University of New Mexico. Mickey has 35 years experience as an exploration geologist and analyst searching for economic deposits of base and precious metals, industrial minerals, uranium, coal, oil and gas, and water in North and South America, Europe, and Asia.

 

Mickey worked for junior explorers, major mining companies, private companies, and investors as a consulting economic geologist for over 20 years, specializing in geological mapping, property evaluation, and business development.  In addition to Mickey’s professional credentials and experience, he is high-altitude proficient, and is bilingual in English and Spanish. From 2003 to 2006, he made four outcrop ore discoveries in Peru, Nevada, Chile, and British Columbia. 

 

Mickey is well-known and highly respected throughout the mining and exploration community due to his ongoing work as an analyst, writer, and speaker.

 

Contact: Contact@MercenaryGeologist.com

 

Acknowledgement: Michelle Lopez is the editor of MercenaryGeologist.com.

 

Disclaimer: I am not a certified financial analyst, broker, or professional qualified to offer investment advice. Nothing in a report, commentary, this website, interview, and other content constitutes or can be construed as investment advice or an offer or solicitation to buy or sell stock. Information is obtained from research of public documents and content available on the company’s website, regulatory filings, various stock exchange websites, and stock information services, through discussions with company representatives, agents, other professionals and investors, and field visits. While the information is believed to be accurate and reliable, it is not guaranteed or implied to be so. The information may not be complete or correct; it is provided in good faith but without any legal responsibility or obligation to provide future updates. I accept no responsibility, or assume any liability, whatsoever, for any direct, indirect or consequential loss arising from the use of the information. The information contained in a report, commentary, this website, interview, and other content is subject to change without notice, may become outdated, and will not be updated. A report, commentary, this website, interview, and other content reflect my personal opinions and views and nothing more. All content of this website is subject to international copyright protection and no part or portion of this website, report, commentary, interview, and other content may be altered, reproduced, copied, emailed, faxed, or distributed in any form without the express written consent of Michael S. (Mickey) Fulp, Mercenary Geologist.com LLC.

Copyright © 2012 MercenaryGeologist.com. LLC All Rights Reserved.


-- Posted Monday, 29 October 2012 | Digg This Article | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2019



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.