Quote:
Originally Posted by wig
And what if you start your history lesson in 1980? How does your "Simple Example" work out then?
Anybody can pick arbitrary dates... Would you find it compelling replaced your dates of 2000 and 2010 with 1980 and 1990?
And finally, you have to exit the trade before you will even have a "trading" point to be made.
I'll agree with you on one thing, the level of ignorance is astounding.
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Look this thing is not for the ones that don't have a basic financial education. If you don't know or understand basics of economics or don't know from where to take your information. Then it's the same as gambling.
Look at this graph.
Graph #1
now it's self explanatory. You right people in 2000 based on only on the graph and relying on MSM information could not been able to make a right decision on where the wind will going to blow in the future. You have to factor into the equation other indexes in order to get the more accurate picture of where the things are going to move.
Only the people that have the inside knowledge, research institutes, etc. have the ability to predicts where the trend is going to move. I know of one guy, his name is Port Stanberry, hes a director of a financial research firm. When the price of gold was $500 he said it would reach $2000. Everyone ridiculed and laughed at him saying what a crack pot. Now the price is $1400 and 2k doesn't seem too far fetched now. Isn't it?
Gold price is easy to estimate and it's based on how much money the fed is going to print. Now this guy says that the price of gold is going to have to reach 10k to only balance itself for the money the fed already printed. Now it's without taking into account what the fed is going to do next. Now they plan QE2 (quantitative easing 2), what simply means that they going to print another round of money from the air.
Graph #2
http://research.stlouisfed.org/fred2/series/BASE
This is taken from the official site of the Federal Reserve Bank of St. Louis.
Now if the fed is going to continue with the same politics of money supply increase. What we can actually see is the gold jumping to 20k, 40, 50k it's a real possibility in that situation. This only depends on how much times they are going to press the 0 number after the 1 when they decide on the sum of liquidity to add to the economy.
You can watch Port Stanberry's latest presentation about what is going to happen here:
http://www.endofamerica3.com
he mainly talks about the fact of US dollar being a reserve currency of the world and what will it mean when US loose that status. Only this one thing will cause a total shake up in the financial affairs in the United States.
His site is stansberryresearch.com
Not directed against you personally but I hate when people assume a lazy pose with their head in the sand
and start to shoot accusations
from their butt in every direction without even a simple basis for their argument's. This indicates of a massive ignorance.