I was reading a book titled Rich Dad's Advisors Guide to Investing in Gold and Silver by Michael Maloney, when I came to the conclusion, because of a passage I read in the book, that Gold is significantly under-priced!
Infact, Mostafa's assertion, that gold would appreciate rapidly to a price of USD1500 per ounce between 2008 and 2015, could be eminently cautious/conservative.
The passage that caught my attention was there in the preface, in juxtaposition to words that failed to strike me with the force-of-insight that the following excerpt bears:
"For the last 2,400 years a pattern was continually repeated in which governments debase their money supply", and "as the debasement progresses, the population senses the loss of their purchasing power. Then something miraculous happens. Through the free market system, the will of the public causes gold and silver to automatically revalue"
...What is the enumerative translation of the preceding excerpt?
I searched hard for an answer, and found it in an article by 'The Mogambo Guru', Richard Daughty - COO of Smith Consultant Group, titled Not Quite Like That. Which basically says that, as of September 2008, the United States had in circulation approximately US$829 billion in actual (never mind the electronic money, and 'other cash' securities) US Federal Reserve cash-and-coins, i.e currency securities based on 'physical presence'; whose transactions have a temporal simultaneity. This was against the Fed's aggregate gold reserves of 261 million ounces.
Therefore, if you seek to find out the price of gold per ounce according to the information above, you'd divide US$829 billion by 261 million ounces to get a price per ounce of USD3176.24 per ounce. That is the 'real price' of gold according to US aggregate-currency-in-circulation figures, and US aggregate gold reserves.
Hence, If you convert all 'currencies in circulation as cash' in the world to their USD equivalent, and divide that figure by the total gold reserves held by reserve banks all over the world, you should be able to come-up with a rough estimate of the 'real-price' of gold.
Assuming that the 'will of the public causes gold and silver to automatically revalue' in the future, that is the figure that the price of gold will converge towards!
Interesting stuff!
Infact, Mostafa's assertion, that gold would appreciate rapidly to a price of USD1500 per ounce between 2008 and 2015, could be eminently cautious/conservative.
The passage that caught my attention was there in the preface, in juxtaposition to words that failed to strike me with the force-of-insight that the following excerpt bears:
"For the last 2,400 years a pattern was continually repeated in which governments debase their money supply", and "as the debasement progresses, the population senses the loss of their purchasing power. Then something miraculous happens. Through the free market system, the will of the public causes gold and silver to automatically revalue"
...What is the enumerative translation of the preceding excerpt?
I searched hard for an answer, and found it in an article by 'The Mogambo Guru', Richard Daughty - COO of Smith Consultant Group, titled Not Quite Like That. Which basically says that, as of September 2008, the United States had in circulation approximately US$829 billion in actual (never mind the electronic money, and 'other cash' securities) US Federal Reserve cash-and-coins, i.e currency securities based on 'physical presence'; whose transactions have a temporal simultaneity. This was against the Fed's aggregate gold reserves of 261 million ounces.
Therefore, if you seek to find out the price of gold per ounce according to the information above, you'd divide US$829 billion by 261 million ounces to get a price per ounce of USD3176.24 per ounce. That is the 'real price' of gold according to US aggregate-currency-in-circulation figures, and US aggregate gold reserves.
Hence, If you convert all 'currencies in circulation as cash' in the world to their USD equivalent, and divide that figure by the total gold reserves held by reserve banks all over the world, you should be able to come-up with a rough estimate of the 'real-price' of gold.
Assuming that the 'will of the public causes gold and silver to automatically revalue' in the future, that is the figure that the price of gold will converge towards!
Interesting stuff!
