View Full Version : Silver and gold stronger than ever.

25th February 2010, 05:58
The last time the dollar index was at 80 gold was $940 per ounce and silver was $14. It is my position that silver and gold has decoupled from the dollar index. The national debt continues to rise and the FED will be holding rates low indefinitely and the second stimulus is now a reality. More nations than ever are at risk for sovereign default which is the only thing giving the dollar index a boost. But saying you are not fat compared to the next fattest person in the room does not mean you are not at risk for obesity related disease and likewise saying the dollar is a safer place to park your money than any other fiat currency is equally nonsensical. Although Bernanke has yet to fly over NYC throwing money from a helicopter this option remains on the table. Amity Schlaes rightly posits that "our leaders treat an inflation crisis as the lesser threat, a remote possibility that warrants lip service, at most." Scott Brown voting to support the jobs stimulus reflects this attitude. She also aptly observes that Europe is in more trouble than its currency suggests and that this region's entitlement and pension burdens exceed those of the U.S. The fiscal crises in Greece reminds us that the Euro may be more vulnerable than the USD. While this fact may prop up the dollar temporarily in the long run unless we stop spending money we do not have the next bubble you see will be a dollar bubble. And in my opinion the decoupling of gold from the USD this year indicates that the dollar bubble has just already begun to be inflated and that our policy makers will continue to do so until in bursts. You should prepare yourself and family for this accordingly........I know I will be.

Buy silver!!

beach miner
25th February 2010, 06:46
Good to see your back. Hope ya got a good rest. This market is like drifting around in a fog, never noing if a rock is gonna show up. I'm in for the long haul, so I'll just have to wait for it to clear up.

25th February 2010, 11:36
I think what you are saying is confusing.

Fundamentally speaking, the dollar, silver, gold are joined at the hip. Most here know that silver and gold maintain their value as the the dollar is devalued. Silver and gold will rise in price as fiat currencies are devalued. This relationship will not change as the dollar and other currenies collapse.

Watching an indicator, like the dollar index, one can easily see that more often than not (whether looking at the long term or the short term), gold and silver move inversely to gold. The dollar index does reflect the devaluation of the dollar and other currencies (not all currencies). There are timeframes when gold and silver are not moving in opposite directions of the dollar index. When saying that gold and silver have decoupled from the dollar index, I have to assume that what you mean is....that this is one of those times. But I would add that such a condition is only temporary. The fundamentals that establish the inverse relationship between the dollar, silver, and gold will reassert itself.

IMO the fact that gold and silver are now higher in price than the last time the dollar was at 80 points reflects the ongoing deterioration of fundamentals.....of governments' debt and their currencies.

I've raised this point before about the use of technical analysis and the use of abstracted data to arrive at connections that do not exist. IMO there exists no coupling between gold/silver price and the dollar index. It is the fundamentals unique to each market that makes the price.

25th February 2010, 12:08