E.D. Hart

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  • Gold - Not the Safe Haven People Think it Is
    The US dollars value is purely psychological, and only accepted as valuable because it is backstopped by the "full faith and credit of the US Government." In short, the ability of our government to tax and borrow.

    Every paper currency ever created has reverted to its intrinsic value given enough time.


    Gold has had value in every society ever discovered, from tribes in the Amazon, the Egytians, the Macedonians, Greeks, Romans, and Byzantines. Gold has 10,000 years of history as a store of value.

    To say golds value is purely irrational and psychological begs the question: compared to what?
    Dec 10 13:55 pm |Rating: +1 0 |Link to Comment |View article
  • Is the Gold Rally Really Over?
    David,
    First you raise some valid points about credit creation. You make a good case that we are facing two options: deflation or inflation. Then you call previous SA community members "gold bugs", which is both dismissive, and implies a certain shallowness of thinking, and emotional response to the markets.

    The people I know that invest in commodities are some of the most critical thinkers, and objective analysts I know. Its not dumb money.

    I cant speak for the others, but I agree with the author. I read in Barrons in 2001 that gold was only going down because of the coming deflation.

    oops.

    Soooooo, noboby really knows what the future holds. We might be facing deflation. But that would require several unlikely events to occur concurrently.

    Yes, that Japaneese managed to deflate...this is true. But with Bernanke at the helm, as a known and committed inflater, who has written white papers on how to avoid deflation, we are most likely in inflation territory.

    The commitment, the knowledge, and most importantly the political will and motive is there to make sure deflation never happens in this country. Elections coming up, significant underreporting of real inflation to hide the governments sleight of hand, the GLOBAL growth in M3 of almost all developed countries at rates well in excess of 10%. Fortyfive, or $54 trillion in unfunded future liabilites of the US Government, the real cost of the Iraq war at $3 trillion.

    Great debts typically get inflated away--thats been the lessons of governments of Governments which promise more than they can deliver.

    Finally, the bull market in gold and commodities is a GLOBAL phenomenon. Its not confined to the major but contained US debt implosion.

    Mar 27 21:43 pm |Rating: 0 0 |Link to Comment |View article

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