Friday, October 8, 2010

Nobody believes that the things will collapse until things collapse

In order to have stability in the precious metals market, there is an agreement between Nations, on how much gold is being released, annually in to the open market, some nations like to cheat; I suspect that China has more gold then the rest of the world. If a Nation would suddenly dump a large quantity of gold it could create a major hick up in the precious metals market. Price of gold verses the purchasing value of it could get tricky. Under normal circumstances when the demand is not fear driven you could get a fat pig for a price of a ten Franks. If you kept your ten Franks for few years or you went an a vacation to a foreign land you will still get a fat pig for ten Franks, even that there was some inflation or exchange rate difference. That when is said that, gold have intrinsic value. In a fear driven market things get somewhat complicated. The gold that you holding, might be selling for a fifty percent loss with the oversupply. We tend to forget the commissions, coming and going. The good news is that most probably, so far, you can get a fat pig for price of ten franks, just don’t forget the commission coming and going and the taxes. Maybe you can look it up and then comment on the subject. A major player has inside scup so he has an upper hand and the infrastructure to bypass the commissions and the taxes, an individual don’t. If the monetary system collapses only coins and precious metals will retain some purchasing value. Thing is that nobody believes that the things will collapse until things collapse. Then again, past performance is not a guaranty for the future performance.

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