The price of the gold will go $1,500/ounce this year

It is time to understand that the Yen and Dollar carry trades are the dominant force in month to month market moves.

The Yen and Dollar go one direction while Commodities including Gold and oil, most currencies including the Euro, and the stock market go the other direction. This was true in 2008 and it is still true now.

 

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Mod hat I have merged a three post thread on gold and silver into this larger one (in accordance with Plazma's and my desire to avoid starting new threads when existing one can be used.) Post 17 was the OP of the now merged three post thread (18 & 19 are the other two). It was called: “2015 Gold and Silver rush.”

Again try to use existing threads if subject is similar instead of starting a new one.
This conserves space in the B&E forum list of active threads. – I.e. allows one more to be displayed on page 1, making it easier to find suitable existing thread.

 

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Read and see (there is a video) a lot about gold at:
http://money.cnn.com/2009/11/12/news/economy/us_gold/index.htm

 

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P.Schiff has said he expects gold to top $5000

 

Does he say before (date)? Or is he safely following the "only one" of the what and when rule?

 

Gains on gold are NOT "capital gains"

"... Unbeknownst to most investors, gold is considered a collectible not a capital asset. In plain English, this means that despite the fact that many people believe they are investing in gold, the Internal Revenue Service (IRS) believes that they are collecting it. ..."

From: http://www.moneymorning.com/ (November 18 edition) article titled:
"You May Not be Making as Much on Gold as You Think"

By Keith Fitz-Gerald, Chief Investment Strategist
Money Morning/The Money Map Report

 

What if it is paper gold shares. I did not read the article.

 

I can safely say I know a man that is making a fortune trading gold.

Billy - Schiff said it in an interview a few weeks ago. He is using very fundamental analysis of economies to say that the US dollar will fall much further, as he sees no other possibility. And if the US dollar falls so much, gold will necessarily rise a lot too.

He has more credentials than most so he is one of the more valuable predictors.

 

In September, I predicted that "Feds is preparing another financial tsunami in the rest days of this year. ..... The gold will go $1,500 to $2,000/ounce. The exchange rate of the will go 1.6 dollar/Euro or higher and the Japanese yen will go 80/dollar or higher."

The gold price was about $1,000/oz at that time. It is $1,120/oz these days. Euro now is $1.5/Euro and yen is about 89/dollar.

The speculators gathered the gold at the price near $900/oz. A profit margin at $1,500/oz is natural. It could be reached in the rest days of this year. Will the gold price go over $1,500/oz? It depends on the situation how the speculators unload the hot potatoes (high price gold) into the hands of public. After the transferring been done, notice the big topic in the media - article to praise the value of gold and report of the short supply of it, war, inflation,.... It's the time the gold bubble going broken.



I have talked about "China and India co-operate with the Feds" to push up the gold price in that September message. On November 3, the IMF sold the Central Bank of India 200 metric tons of gold at $1043/oz. The news report helped the gold went over the strategic point of $1,100/oz easily and stood steady there. My predict is once more proved correct.

I think the Feds is the hand behind the stock market collapse of 2000 (dot.com bubble) and the housing bubble of 2007. Six years ago, I wrote "180. Beware of housing bubble (11/16/03)". I said, "anytime soon there will be a broken housing bubble, and a staggering economy following it." Anyhow, the Feds failed to eliminate me. So the housing bubble kept growing up until it explodes in 2007. Now we see the staggering economy.

 

Your post strikes me as confused. Iam not clear what you are expressing, but want to correct your facts here:

When you posted the Euro would buy ~1.45 $. As I post it buys 1.4395 dollars.

I don't know what the dollar Yen ratio was when you posted but just now it is 90.23 Yen to the dollar.

I have a display of four different currencies along the bottom of my screen. It only takes less than 4mm height and shows red or green the changes , the values and percent changes about every 15 minutes. In full screen mode it shows graphs of almost any 12 items you wish (8 of mine are stocks). It is free from MarketBrowser.com but they will try to sell you a more capabable verion occasionally.

 

It depends on what you are referring to when you say gold shares. If you are talking about shares in gold producing companies, that is one thing. If you are referring to exchange traded gold funds like GLD, that is another. The exchange traded bullion backed fund is a direct ownership in gold and treated as such.

 

I just checked, the ETF GLD is supposed to be taxed as a collectible. The whole theory behind lower taxes for capital gains does not really hold up. Capital gains producing investments are rarely about taking risks that increase production. There should not be taxes on the inflation portion of a capital gain but otherwise capital gains should be taxed as ordinary income. Calling gold bar or the ETF GLD a collectible is absurd.

I would assume that Gold options are not taxed as collectibles but I don't know.

 

I agree with part of your post I made bold. In fact I think all income should be taxed the same way, but with a progressive rate. The purpose of taxes is to collect revenue for the government’s programs - not to make currently desired social legistation which stays as law to be exploited for many decades if not "forever."

If you want to encourage some activity, such as insulating your home better, or mining, oil drilling or “green energy, etc. do it with special legislation that has an expiration period (“Sunset” laws) –Don’t build it into the tax code. The tax code fills hundreds of books, if printed and has given rise to an entire industry of useless, but profitable parasites on the real economy, which only the rich or corporations can afford to pay. At least half the current tax code is exclusively for the benefit of special interest groups.

The tax code could be fairer and very simple: I have suggested one that fits on a single piece of paper, most of which is the definitions and illustrations. The entire tax law itself fits on a 3 by 5 index card!
See it at: http://www.sciforums.com/showpost.php?p=1792841&postcount=1

I mention just two features here:
(1) No corporation pays any taxes, but must distribute all of its income to real people who do within 10 years (otherwise the IRS annually confiscates the profit from 10 years earlier. All the data required is already in the corporation’s annual reports.). This not only eliminates the huge waste of corporate tax lawyers and tax departments, but more importantly makes corporate decisions be based on the economics of their choices, not upon the tax considerations. (It is a little more complex than described here as foreign corporations do business in the US, there is a “transition period to the new law, etc. – Read full plan at the above link, and related post in that thread.)”

(2) Also to make ALL decisions have only an economic basis, there are no tax deductions, for anything. That includes your home mortgages expenses. Often, now a childless couple with high salary income must buy a large home in the country to get a large mortgage deduction. That is fine if they want it, but a clear case of tax considerations dominating their decision. Americans love to criticize “central planning” economies, but seldom realize that thru the tax complex code they have perhaps the world’s most centrally planned economy on Earth. There is practically no significant economic decision one makes in which tax considerations do not play a large and distorting role. For example, recently I have been selling some stocks at a loss to offset gains in other stocks. –Tax considerations DOMINATE my trades this time of year.

If society wants to encourage home ownership do it by special legislation, which could be much more effective and cost the government less. To illustrate with my prior “high-salary childless” couple: Why give them a $200,000 annual mortgage deduction on their six bed room country estate? Instead there could be special legislation which granted (just to illustrate) $3000/ per child under 18 for home owners and only $2000 per child for apartment dwellers. I am not recommending this specific formulation, only illustrating. – The special “social purpose legislation” should be more rationally designed to support the desired social objectives, and not just part of the tax code for all to exploit with associated distortions in the economy. These distortions are great. For example, the home mortgage deduction is largely responsible for the soon to be unsupportable “suburban infrastructure” the US has built, which is very unsuitable for the high energy cost era that is coming. FEW REALIZE HOW COSTLY AND DAMAGING THE SPECIAL PURPOSE RULES OF THE TAX CODE ARE.

 

I think the Feds prepared an Iran war to temporarily boost the price of gold, oil and other foreign currency so they could make money on that crisis. See my thread "An Iran war crisis in September" (which now being moved to "Pseudoscience")) Which originally planed to happen in the end of this year.

 

Nouriel Roubini Predicts Gold Bubble Will Burst

Nouriel Roubini Predicts Gold Bubble Will Burst

http://www.nuwireinvestor.com/articles/nouriel-roubini-predicts-gold-bubble-will-burst-54284.aspx

 

The OP was made in October 2009 but thread's title will be true ~2.5 years later:

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Gold is rising faster than US debt & silver faster than gold.

 

And that right there makes any such plan an absolute political impossibility. Any politician who seriously suggested removing the mortgage deduction would be out of office as soon as his present term was up.

It's also a fictional example that doesn't make much sense. You don't buy a big house in order to get a big deduction, because doing so doesn't put money in your pockets. It just means that you pay your money to a bank instead of to the government.

The effect of the deduction is that people can afford a more expensive house than they could otherwise, and so they buy bigger, more expensive houses than they would otherwise. Nobody buys an oversized house just to get a big deduction - that's stupid, unless you have some reason to prefer paying a bank over paying the government. They buy it because they want the big house. The deduction just allows them to afford it (by subsidizing their mortgage on the backs of renters, essentially). From a balance-sheet perspective, you'd do just as well to buy a smaller house (with a smaller deduction) and save/invest the difference in mortgage payments. It's simply a question of whether you want a bigger house, or more income.

Tax incentives - even, fairly strong ones - are not the same as what is meant by "centrally planned economy." A centrally planned economy would be one in which the supply and allocation of, say, houses are explicitly, directly decided by a central authority. A system of incentives is a far tamer beast than that.

I'd agree with the weaker statement that Americans like to go on about "free-market economy" when we actually have a mixed economy. But you go too far in conflating such with a command economy. The Soviet Union had a command economy. The United States has a mixed economy. A few libertarian tiny islands have actual free market economies.

 

In your opinion, does China have a command, mix or free economy?

 

Quad: You are replying to old post 33, which contains a link to my even older suggestion for a fair and simple (fits on a 3by5 index card, not several rooms full of books as the IRS code requires to cover all the special privileges incorporated for special interest groups or for making government pressure on economic choices – that is what I call "central planning" but call it "central pressure on economic decisions" if you like a longer more descriptive term.)

Yes, they will be building snowmen in hell, before the US kills the home-mortgage deduction, which distorts the choice of your residence towards owning instead of renting. This is a fine and important example of central planning. Even an often stated public policy of encouraging home ownership, rather than leaving the playing field level for rational economic choice between buying, B, or renting, R. – i.e. free of "government bias" or "central pressure" on the choice.

False. By that logic, one would not reduce their current taxes by contributing to various tax deferred saving plans either as that too does not put money in your pocket. There are limits on how much you can tax defer and wealthy childless couples often have joint incomes far above those limits. Their main way to further reduce current taxes is to buy a big house, with big deductable mortgage payments. – Unlike the other tax deferred options available to them, there is no limit on home mortgage (unless one had been added since I was using this as a way to defer taxes). But even if there is a limit now the high income childless couple may need a 7 bedroom house on a 10 acre country estate to reduce their current taxes. There is really no difference between a self-direct 401b and big house as tax deferral plans. Both have risk – the stocks you chose may go down. The house you buy may not appreciate, but both decrease your current taxes, and normally are much more profitable than giving your money to the government as taxes. Buying a house also has the advantage of converting current income into into tax deferred investment with a lower tax rate capital gain years later - perhaps even when you have retired and have little taxable income (are in a lower tax bracket too!).

Well, perhaps there is one difference – with the big house you can more easily impress your friend than with funds in a 401k. A tax deferral is a tax deferral so both big mortgage and max utilization of 401k etc. plans are attractive to high income people for their current reduction of taxable income even though BOTH take money out of your pocket. In any case your logic, based on “taking money out of your pocket,” is false.

More confused thinking: Of course there is a huge difference – none of the taxes paid will profit you, but when you sell the big house after a few decades you will get a huge profit, taxed at capital gain rate (or even lower if it was the only residence you sold in the last five years).

More confused thinking. Again there is a huge difference: The mortgage REDUCES you current taxes. “Save/ and invest” does not, after you have done all the saving/ investing via 401b etc. plans the law allows.

I agree that a “command economy” is very different from a non-command “centrally planned” economy. In the first the government makes the choices for you. In the second the government biases your choices, sometimes by tens of thousands of dollars to encourage B instead of R. Or $7500 for choosing an electric vehicle, etc.

My whole point in post 33, and the simple tax law with link there, was that the tax law’s SOLE PURPOSE should be to raise the revenue need for government operation, not to do “social planning” or “central planning” or “biasing of economic decisions” or special tax advantage for the special interest groups with funds for Congressional lobbies etc.- All of that is both unfair and worse: It tilts the economic playing field, at times to strongly control your “free choices” to be as the government wants (or as the Congressional bribes bought). All these social engineering and special privilege laws of the government should be by specific legislation, with expiration dates, which can be extended by Congress. Social engineering / central planning should not buried in the tax law volumes, where they stay for decades, unknown to most but well known by the special interest groups they benefit.

 

If forced to choose one of these three: Mixed. But that is easily misunderstood. IMHO, China has invented a more successful economic system (proven by three decades of ~10% annual growth). I.e. for the entire infrastructure needed they have a command economy - with 10 five year plans to guide it. They use mainly economics and engineers to make these plans, not as in the US where the effect upon congressional re-election chances is the first consideration and little is invested with no payoff for many years, like the smart electric grid China is building, worlds largest high speed rail system* etc.

More than 90% of US Congressmen and ALL of the top level in the Administration are lawyers, concerned strongly with the next election. In China all but one of the CCP directorship are trained engineers. That one was educated as a geologist. - Not a lawyer in the bunch! China will never need to shut down the government over political disagreements between lawyers looking at their re-elections effects.

As for the market place it is run b y the invisible hand of Adam Smith. - Much less regulated than in the US, which occasionally causes problems, like contaminated milk, etc. If you have a car and want to make a little extra money being a cab with it after work, you can.** In NYC, the cab license / permit is bought and sold, for about $40,000 dollars, as I recall - Almost every market place activity is very strong regulated by the US government. - If you don't think so, make some homemade cheese and try to publicly sell it. China, believes in "let the buyer beware" much more than the US does, but they are increasingly becoming more like the US. For example, there now is a "Chinese FDA" for new pharmaceutical drugs but the traditional drugs are exempt from its control. Etc. If you want to sell established “cures all snake oil” door to door, or even in your little "herbal medicine shop", you can. The rhinoceros is in trouble as it is widely believed for centuries that powder from its horn is a natural Viagra, etc. Placebo effect keeps its price per gram much higher than gold’s!

The US market place runs under "Big Brother's rules", which try to prevent problems. China's market place is more free enterprise system, but if you do cause serious problem you probably will at least go to jail, if not be executed (as several of the tainted milk producers were.)

*I.e. more miles of high speed (highest in the world) rails than the rest of the world's total by end of 2012!

** This is probably no longer true in the major cities. Granting taxi permits is an easy way for officials to collect bribes. In many ways China is becoming more like America, and in bribes China is far advanced over America. - As I said earlier China has very "free enterprise" system, and that certainly includes getting bribes, if you can.