Re: $600 Gold and $12 Silver


"Mike Marotta" <mercury@xxxxxxxxxxxxx> wrote in message
news:1144404563.735308.95670@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
What I like about gold especially but also silver is that they are
"pure" markets.

Of course, all markets are pure, just as physics applies to all
systems. However, government regulation is a kind of friction, so we
conceptualize around that while building simple models. Misinformation
and dysinformation are "out of round" conditions, limitations of
calcularions (4/2 = 1.99999), and other analogs.

Gold is the purchase and sale of currency against a very arbitrary
physical commodity. As the true standard, of course, gold is the real
price of things and we just use "dollars" for other reasons. It is not
that gold has "risen" to $600 per ounce, but that the dollar has fallen
to 1/600 of an ounce or 0.0518 1/3 grams, however you want to think of
it.


Why then during the period gold went from $400 to almost $600 did the price of
bread, milk, and most other staples remain about the same?

Bruce


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