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Thread: Betting on the Yellow Brick Road, or, Counting Chicken(Taco)s Before They Hatch

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    Fuhlauto Balogna Ridenfool's Avatar
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    Wink Betting on the Yellow Brick Road, or, Counting Chicken(Taco)s Before They Hatch

    Quote Originally Posted by Austin Bike View Post
    Instead of arguing the point, let's revisit this thread in 1 year and compare the price relative to today.

    The loser buys tacodeli for the winner after a greenbelt ride.
    Well, 1 year has almost passed and I'm looking forward to a greenbelt ride, and to some Tacodeli goodness.

    It is unlikely that the rise from around $940.00 to about $1200.00 an ounce over the past twelve months will be reversed in the next couple of weeks. Not impossible, but highly unlikely.

    Currently, the spot price is up about 20% from a year ago.

    The (non-numismatic) one ounce American Gold Eagle bullion coin is selling in the neighborhood of $1350.00 on eBay, up nearly 30% over spot from a year ago.

    Here's an interesting article with lots of charts to illustrate the key points.

    The most interesting thing to me about the article is where it compares the current fundamentals with historical points where bullion has topped out.

    The fundamentals show the current decade-long bull run in Gold is far from reaching conditions associated with an imminent drop in the spot price.

    What does it all mean?

    If you had purchased bullion a year ago your ability to purchase bike parts would have increased by 20% compared to holding FedRes Notes for a year.

    If you had purchased and held bullion ten years ago you would have quintupled (500%) the purchasing power of your year 2000 labor, compared to holding FedRes Notes (US Dollars) for the same period. i.e.: the labor it took to buy a $500 bike then would buy a $2500 bike today.

    It also means that I may not have ridden BCGB in a year.
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    OnPermanent Vacation jmhix's Avatar
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    I've got a friend that was laid off from work ~2000 and we all thought he was an idiot for cashing out his retirement account ($250K) and buying gold...he's been laughing at us for years and retired at the age of 42...

  3. #3
    Mojo Slow-poke Austin Bike's Avatar
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    You do have to complete the full GB ride in order to get the tacos.
    "A person can work up a mean, mean thirst after a hard day of nothing much at all" - Paul Westerberg

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    Fuhlauto Balogna Ridenfool's Avatar
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    Quote Originally Posted by Austin Bike View Post
    You do have to complete the full GB ride in order to get the tacos.
    I knew there was a catch . . .
    "When we remember we are all mad, the mysteries of life disappear and life stands explained."
    ~ Mark Twain
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  5. #5
    Fuhlauto Balogna Ridenfool's Avatar
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    Hey AB,

    I was pondering that taco, once again, as I saw the gold price on the COMEX has topped $1600/oz. today. Up about 28% over the preceding 12 months.

    Man, I need to get out to ride the GB. It's been a long time since I've "completed" a GB ride in time to make it to Taco Deli before they close for the afternoon. Maybe this Fall I'll make it out and finally take the prize.

    Anyone not think gold will top $2000/oz. by Election Day 2012?

    Buy bike parts now, they'll hold their value better than the dollar will.

    Happy Trails
    "When we remember we are all mad, the mysteries of life disappear and life stands explained."
    ~ Mark Twain
    Local Trails - Rocky Hill Ranch

  6. #6
    MoJo Mother Superior pittzer's Avatar
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    I'm shocked, SHOCKED that gold hit $1600 today.

    QE1...QE2...QE3 on the horizon.

    Little Timmy G and Obama's merry band demanding another $2 trillion increase in debt.

    The Chinese growing weary of our paper.

    Who could have possibly seen this coming?

  7. #7
    Poppin Fresh Doughboy's Avatar
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    Quote Originally Posted by Ridenfool View Post
    I knew there was a catch . . .
    ...and you have to try to pay for them in gold.

  8. #8
    Fuhlauto Balogna Ridenfool's Avatar
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    Quote Originally Posted by pittzer View Post
    Who could have possibly seen this coming?
    Only those who have studied the history of money, or, who had the good fortune to be steered toward learning more about it.

    The current claim is that the US holds 147.2 million ounces of gold bullion (last audited fifty years ago).

    The total money supply (circulating and deposit currency) is something along the lines of 14 trillion.

    If the US were to back the currency with a mandatory 10% Gold reserve, an ounce would be valued at about $9500 based upon current supply.

    If we were to value the entire supply redeemable in gold, each ounce would equal $95,108 dollars of the total supply.

    The more that the supply is inflated beyond what is required for new goods and services the greater this ratio will become. As long as the fundamental issues are not addressed it seems logical that there is a lot of room for the value of gold (and silver) to rise.

    Historically, fiat currencies die in a very ugly way as those who believe they can save themselves by printing (electronically now) more cause the users of the currency to lose faith. The users then return to what ever other form of exchange is more stable.

    Let's see a show of hands by those who know the most often used forms of money that are adopted when any fiat currency has failed, over and over again for the last several thousand years?

    Only now, we also have MTB bling, which could become a viable option to the historical standards.
    "When we remember we are all mad, the mysteries of life disappear and life stands explained."
    ~ Mark Twain
    Local Trails - Rocky Hill Ranch

  9. #9
    Honky Tonk Badonkadonk! Pimpjuice's Avatar
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    I'm putting my life savings into aluminum and carbon
    Pimpjuice

    It is the lifeforce of the Pimp.
    It's the nectar of the Pimps. It courses through our veins all the time, and at some points in daily life it is at an exponential level. And at that point Pimp Nirvana has been achieved. Pachoota will fall from the sky and blowjobs will occur everywhere.
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  10. #10
    MoJo Mother Superior pittzer's Avatar
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    Quote Originally Posted by Ridenfool View Post
    Only those who have studied the history of money, or, who had the good fortune to be steered toward learning more about it.

    The current claim is that the US holds 147.2 million ounces of gold bullion (last audited fifty years ago).

    The total money supply (circulating and deposit currency) is something along the lines of 14 trillion.

    If the US were to back the currency with a mandatory 10% Gold reserve, an ounce would be valued at about $9500 based upon current supply.

    If we were to value the entire supply redeemable in gold, each ounce would equal $95,108 dollars of the total supply.

    The more that the supply is inflated beyond what is required for new goods and services the greater this ratio will become. As long as the fundamental issues are not addressed it seems logical that there is a lot of room for the value of gold (and silver) to rise.

    Historically, fiat currencies die in a very ugly way as those who believe they can save themselves by printing (electronically now) more cause the users of the currency to lose faith. The users then return to what ever other form of exchange is more stable.

    Let's see a show of hands by those who know the most often used forms of money that are adopted when any fiat currency has failed, over and over again for the last several thousand years?

    Only now, we also have MTB bling, which could become a viable option to the historical standards.
    I think you missed my sarcasm. I honestly believe people will not get it until things get like this.


  11. #11
    Shop Owner/Frame Builder CBaron's Avatar
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    Quote Originally Posted by pittzer View Post
    I think you missed my sarcasm. I honestly believe people will not get it until things get like this.


    And what I think is not represented in the photo to well....is that this lil' kid is just heading over to the local market to buy a load of bread to take back to his family.

    -CJB


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  12. #12
    h8ter of all things fun. The Toninator's Avatar
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    Quote Originally Posted by Ridenfool View Post
    Only those who have studied the history of money, or, who had the good fortune to be steered toward learning more about it.

    The current claim is that the US holds 147.2 million ounces of gold bullion (last audited fifty years ago).

    The total money supply (circulating and deposit currency) is something along the lines of 14 trillion.

    If the US were to back the currency with a mandatory 10% Gold reserve, an ounce would be valued at about $9500 based upon current supply.

    If we were to value the entire supply redeemable in gold, each ounce would equal $95,108 dollars of the total supply.

    The more that the supply is inflated beyond what is required for new goods and services the greater this ratio will become. As long as the fundamental issues are not addressed it seems logical that there is a lot of room for the value of gold (and silver) to rise.

    Historically, fiat currencies die in a very ugly way as those who believe they can save themselves by printing (electronically now) more cause the users of the currency to lose faith. The users then return to what ever other form of exchange is more stable.

    Let's see a show of hands by those who know the most often used forms of money that are adopted when any fiat currency has failed, over and over again for the last several thousand years?

    Only now, we also have MTB bling, which could become a viable option to the historical standards.
    The United States Bullion Depository holds 4,578 metric tons (5046 tons) of gold bullion (147.2 million oz. troy). This is roughly 2.5% of all the gold ever refined throughout human history. Even so, the depository is second in the United States to the Federal Reserve Bank of New York's underground vault in Manhattan, which holds 7,000 metric tons (7716 tons) of gold bullion (160.8 million oz. troy), some of it in trust for foreign nations, central banks and official international organizations.
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  13. #13
    Fuhlauto Balogna Ridenfool's Avatar
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    I kinda figured it was tongue in cheek, and, it made a good springboard to share this additional info I had been pondering. Thanks!

    Is that photo from Zimbabwe? (The most recent fiat currency failure in the unbroken line throughout the seemingly endless history of debasement by government decree.)
    "When we remember we are all mad, the mysteries of life disappear and life stands explained."
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    Poppin Fresh Doughboy's Avatar
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    Quote Originally Posted by Ridenfool View Post
    I kinda figured it was tongue in cheek, and, it made a good springboard to share this additional info I had been pondering. Thanks!

    Is that photo from Zimbabwe? (The most recent fiat currency failure in the unbroken line throughout the seemingly endless history of debasement by government decree.)
    That kid was probably hiding all that cash in de-basement. I bet it was 100 decrees down there.

  15. #15
    Fuhlauto Balogna Ridenfool's Avatar
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    Quote Originally Posted by The Toninator View Post
    The United States Bullion Depository holds 4,578 metric tons (5046 tons) of gold bullion (147.2 million oz. troy). This is roughly 2.5% of all the gold ever refined throughout human history. Even so, the depository is second in the United States to the Federal Reserve Bank of New York's underground vault in Manhattan, which holds 7,000 metric tons (7716 tons) of gold bullion (160.8 million oz. troy), some of it in trust for foreign nations, central banks and official international organizations.
    Keep in mind the Federal Reserve is a private corporation and not part of the US government. Whatever gold the Fed owns is controlled by the board members, which are predominantly European banking families.

    Of course, holding so many nations' gold there in New York could be strategic should the US decide to appropriate it. (Isn't that how Gaddafi lost his hoard?)

    Maybe this is why many Asian countries are moving their gold from London and New York City to the recently built depository in Hong Kong.
    "When we remember we are all mad, the mysteries of life disappear and life stands explained."
    ~ Mark Twain
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    Fuhlauto Balogna Ridenfool's Avatar
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    Quote Originally Posted by Ridenfool View Post
    (Isn't that how Gaddafi lost his hoard?)
    My mistake, they didn't seize his gold, they froze his bank accounts.
    "When we remember we are all mad, the mysteries of life disappear and life stands explained."
    ~ Mark Twain
    Local Trails - Rocky Hill Ranch

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    MoJo Mother Superior pittzer's Avatar
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    Quote Originally Posted by Ridenfool View Post
    My mistake, they didn't seize his gold, they froze his bank accounts.
    Don't think they aren't above it though.

    Link

  18. #18
    h8ter of all things fun. The Toninator's Avatar
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    Interesting note that Gold has traded and CLOSED higher than Platinum for more than a week. It’s like dogs and cats getting it on.
    Ya'll don't know what it's like
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  19. #19
    Fuhlauto Balogna Ridenfool's Avatar
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    I think there was some big fear-trading going on in Europe as folks positioned themselves for the worst as France and Germany try to prevent the Greek default. Gold rose to far too fast and should be consolidating for a while. Last week's big dip was expected. Many are still anticipating the spot price to bust $2000 by the end of the year.
    "When we remember we are all mad, the mysteries of life disappear and life stands explained."
    ~ Mark Twain
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  20. #20
    h8ter of all things fun. The Toninator's Avatar
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    http://www.thebulliondesk.com/


    London 19/09/2011 - Gold edged higher on Monday morning in European trading when fresh concerns about the eurozone sovereign debt crisis boosted demand for safe-haven assets, while riskier assets lost ground.

    Spot gold was recently quoted at $1,814.65-1,815.50 per ounce, up $2.93 from Friday's close of $1,811.72. Gold touched a two-week low last week of $1,762.35.

    “Given the long-term nature of the problems surrounding bank capitalisation and the European sovereign debt crisis, we think it is too early to write off safe havens such as gold,” Credit Suisse said. "On the contrary, we think gold prices are likely to gain further ground."

    The euro tumbled against the dollar on Monday, dropping as low as 1.34 against the dollar from 1.3791 on Friday, on waning confidence in the single currency.

    A meeting of eurozone finance ministers failed to produce a clear strategy to prevent Greece and other peripheral eurozone economies from sliding into default.

    With no end to the European debt crisis in sight, investor sentiment is gloomy - many believe a default in Greece may trigger a financial crisis similar to that which followed the collapse of Lehman Brothers in 2008.

    Fears of a default by Greece triggering a financial crisis have made investors extremely wary of any news that indicates difficultly in devising a solution to the eurozone debt crisis.

    Italy is also at risk. Ratings agency Moody’s Investor Services is nearing the end of a 90-day review of the country's credit rating, the result of which is likely to influence the direction of gold.

    “The metal has again regained the $1,800 mark and has begun this morning with a firm tone as Greek debt fears again undermine confidence,” FastMarkets analyst James Moore said. “But one threat to gold remains the announcement, or at least the suggestion, of further stimulus measures by the Fed.”

    Market participants are awaiting the outcome from the policy meeting of the US Federal Reserve on Tuesday and Wednesday. Any form of stimulus for the economy could sustain gold prices but, should the Fed fail to announce a third round of quantitative easing (QE3), gold could reverse direction.

    “Some investors expect [the Fed] to announce a programme to stimulate the economy by buying longer-dated US government debt while selling short paper," Kedia Commodity said. "Many investors have already nicknamed the potential programme 'Operation Twist'. Gold investors expect such a move by the Fed to pressure the dollar, which could boost the value of precious metals."

    Among other precious metals, silver fell 53 cents from Friday’s close of $40.68, spot platinum fell $10 from $1,810 to $1,800-1,810 and palladium was down $10 at around $720-730.
    Ya'll don't know what it's like
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