Enough of Gold's Fair Value of $800/oz.
OK! I've had enough! This idea that Gold's fair value is only $800 an ounce is causing my reason meter to redline. It's making me a little cranky, so bear with me. This all started with a report that stated:
Claude Erb and Campbell Duke figured out the ratio between the price of gold and the stated price inflation from a historical perspective and determined gold was over-priced based on their numerical analysis.
I took this quote from a Daily Bell article. The Daily Bell does not take a position on any specific numerical analysis of the gold price, but did question the claim.
I will raise a new question. Did Erb and Duke consider the effect government subsidies have on the price of every day goods and services? I am familiar with the numbers likely used in the analysis and wrote about this very topic on January 30, 2013. I took my numbers directly from BLS tables.
In that article I drew reference to the price of goods under subsidy and then drew specific reference to the potential cost of a gallon of gas, absent subsidy. For the curious, there is strong evidence that a gallon of gas would be 2 to 3 times the "Fair" price we enjoy today.
So next time someone tells you the "Fair Value" of gold is really $800 an ounce, ask them if they based their statement and their analysis on "stated price inflation" or "government subsidized price inflation."
Need I say more? This time, this is not my opinion, it is a question to which your answer may be different than mine - but, I doubt it.
For more breaking news and thought provocation, visit LearCapital.com on a regular basis and if you would follow me @DaveTheGoldDr I will raise many more questions that you are free to answer any way you like.
Claude Erb and Campbell Duke figured out the ratio between the price of gold and the stated price inflation from a historical perspective and determined gold was over-priced based on their numerical analysis.
I took this quote from a Daily Bell article. The Daily Bell does not take a position on any specific numerical analysis of the gold price, but did question the claim.
I will raise a new question. Did Erb and Duke consider the effect government subsidies have on the price of every day goods and services? I am familiar with the numbers likely used in the analysis and wrote about this very topic on January 30, 2013. I took my numbers directly from BLS tables.
In that article I drew reference to the price of goods under subsidy and then drew specific reference to the potential cost of a gallon of gas, absent subsidy. For the curious, there is strong evidence that a gallon of gas would be 2 to 3 times the "Fair" price we enjoy today.
So next time someone tells you the "Fair Value" of gold is really $800 an ounce, ask them if they based their statement and their analysis on "stated price inflation" or "government subsidized price inflation."
Need I say more? This time, this is not my opinion, it is a question to which your answer may be different than mine - but, I doubt it.
For more breaking news and thought provocation, visit LearCapital.com on a regular basis and if you would follow me @DaveTheGoldDr I will raise many more questions that you are free to answer any way you like.