Why is Gold Worth ANYTHING?

WSJ.com - Opinion: Monetary Reform: The Key to Spending Restraint (Gold Standard)

Unrestricted convertibility of the dollar to gold at the statutory price restricts Federal Reserve creation of excess dollars and the inflation caused by Fed financing of the deficit. This is so because excess dollars in the financial markets, at home or abroad, would lead to redemption of the undesired dollars into gold at the statutory parity price, thus requiring the Fed to reduce the expansion of credit in order to preserve the lawful convertibility parity of the dollar-gold relationship, thereby reducing the threat of inflation.

Read the full article.

Per WSJ: Aden Sisters say the end is almost here - but don't dump your stocks just yet.

By Peter Brimelow, MarketWatch

NEW YORK (MarketWatch) — A veteran hard-money letter is sticking to its apocalyptic scenario. But, while we’re waiting, stocks look good. 

They wrote on Wednesday night: “The gold price is turning parabolic … in true form for the second phase of the bull market. It’s up almost 20% in the last 11 weeks, yet amazingly it could still rise further. Gold is super strong by staying above $1,310. Silver is even better; it’s up 36% in the same 11 weeks, and it’s super strong above $22. Likewise for gold shares … the Gold/Silver Index XAU -0.99%   is very strong above 197.” 

FULL STORY HERE

Streets Are Paved With Gold - GFMS Ltd. WSJ)

“The prospects for gold prices this year remain bright. Investors continue to be concerned about the outlook for inflation… and with the spotlight also shining on the state of government finances, there is every reason to believe that investors will remain focused on the gold market.”

‘Charlie Sheen’: Secret Silver Investor?

CFTC REMOVED Charlie Sheen's post removed from the thousands of investors asking the CFTC for position limits to be set 1000-1500 contracts?  (Including limits for Blythe) 

see comments:

http://comments.cftc.gov/PublicComments/CommentForm.aspx?id=965

WSJ: India Spot Gold, Silver Hit Record High

Lame Stream Media: WSJ Why Dollar's Reign Is Near An End

 The WSJ gets in on the act: softening up the populace for whats next?

For decades, the dollar has served as the world's main reserve currency, but, argues Barry Eichengreen, it will soon have to share that role. Here's why and what it will mean for international markets and companies.

 http://online.wsj.com/article/BT-CO-20110301-714544.html

WSJ Marketwatch: Silver’s still looking good Backwardation, inelastic supply, demand bode well for silver

A Gold Bull and His Prediction: $10,000 an Ounce - WSJ

http://online.wsj.com/article/SB10001424052702304879604575582602233501196.html

'The World Does Not Need to End'
A Gold Bull and His Prediction: $10,000 an Ounce

There are gold bulls. And then there is Shayne McGuire.

The 44-year-old pension-fund manager from Texas, who spoke recently at a gold conference in Berlin, caused a stir among the roomful of gold aficionados. His provocation: A book that predicts the price of the precious metal could soar to $10,000 an ounce, more than seven times its current price.

FULL STORY ON WSJ

Price of Silver Soaring -WSJ

WSJ MarketWatch

SAN FRANCISCO (MarketWatch) — Gold futures sold off Friday on concerns China will soon take steps to rein in its inflation and move to increase interest rates.

Gold for December delivery (GCZ10 1,364, -39.70, -2.83%) dropped $39, or 2.8%, to $1,364.30 an ounce on the Comex division of the New York Mercantile Exchange. The contract earlier traded as low as $1,362.90 an ounce.

Gold had lost more than $30 overnight, but seemed to have recovered somewhat at the start of floor trading. Nervous investors, however, pulled the plug on gold after they saw other commodities and stocks selling off.

If China tightens, it raises the likelihood more countries would follow suit, said Matt Zeman, a trader at LaSalle Futures in Chicago. Gold would lose one of its main engines so far: fear of inflation, he added.

Moreover, gold, which earlier this week posted a fourth consecutive record high, and silver, which has traded at 30-year highs almost daily, “are markets that are going to be very vulnerable to profit-taking,” he said.

WSJ MarketWatch Kurt Brouwer says gold speculation could end badly

Gold's Rise May End Badly for Investors
Nov. 11, 2010
Many investors expect gold to protect their portfolio from economic uncertainty, but gold's recent sharp rise is being fueled by speculation that could end badly for buyers, says Kurt Brouwe.

Time to Sell or Short Gold? WSJ

HighMark Capital Management's David Goerz tell MaketWatch that it's time to sell gold.


This obviously not our opinion for the long term. Click title for link.
Update: How are your gold shorts working out for you?