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One of
the main bear arguments you'll hear is that gold is bound to fall since it is
trading at record highs these days. Yes, gold is trading far above its 1980
peak of $850 but you don't have to be Einstein in order to understand that
today's dollars don't possess the same purchasing power as 1980 dollars. So
if we take a peek at the inflation adjusted chart for gold, the picture
changes dramatically and proves beyond any doubt that gold is nowhere trading
near record highs these days. In order to do so it should be trading above
$2300+..(according to official government inflation data!).
Now
when you take into account the real inflation number instead of the bogus
government inflation numbers, then the picture changes even more to the
extreme. In order to reach inflation adjusted highs when using inflation
statistics reported at www.shadowstats.com, gold
should hit $7000+ ..
The
current drop in price of gold means nothing in the big picture. Gold will
trade at new inflation adjusted highs before this bull market is over
($10.000 by 2015, see also related article 'Last Chance to buy gold below $1000?'
published on Sept 02, 2009).
Eric
Hommelberg
Editor, the Gold
Discovery Letter, the Gold Drivers Report
www.golddrivers.com
All
articles by Eric Hommelberg
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