Is now a good time to sell gold?

[jtryka]

Holy spoon! It's at $885.20 now!

[WinstonWare]

Yeah gold is doing great. My 401k is in the dumper!

[just-john]

GOLD $894.30

SILVER $16.12

[World Colonial]

The idea that there is a recession or a deep recession coming is not ridiculous. Far more ridiculous are those who claimed that the sub-prime problem was not a problem, then when it was obviously a problem that it would not spread and then when it did spread that there will not be a recession. We will not know whether there is "officially" a recession until after the NBER announces one but waiting for that is useless because of the lag you mentioned and in the last two recessions they have been over by the time this was announced because the prior two were really shallow. Most likely, the United States IS in a recession (yes, right now) as even conventional economists like the one from Merrill Lynch just admitted, even though the two quarters of negative GDP have not occurred yet..

 

But the primary reason the prior economic declines were shallow using aggregate statistics (that is, GDP) is because of the credit bubble. And just to be clear, there has NEVER in the history of human civilization been a greater mania than what exists today in the reckless extension of credit. Now whether this credit expansion is over temporarily or not we do not know. But if it is, then the potential economic problems which the United States and by extension the rest of the world (since the credit mania is also global) could be far worse than even what most pessimists expect.

 

As for gold, the expansion or contraction of credit is going to be one of the key factors in the USD price of gold. If credit contracts, then there will be less liquidity available to buy all assets, including gold. But how the available liquidity is used (reduced or not) is dependent upon psychology. If the current problems in the global financial system worsen, then it is entirely possible that credit contraction or not, that liquidity will be drained from other assets and placed into metals including gold.

[michael]

new times and also new experiences will we experience in terms of what is defined as a recession

 

yes we are in a recession now unless you are a hedge fund trader or someone with lots of available cash to spend or have a really good high paying job then no it is not a recession for you it is actually an opportunity time for you to make $$$$

 

it all depends on who and what you are and what you do or dont do

 

but in general for most ofthe populaiseitt is a recession now and will get worse but we will get out of it

 

then the up and coming.............. two tiered usa currency one color to circulate outside of the usa borders and another kind of coloration which will only be allowed to circulate in the usa

 

then after that a re-valueation of the usd

[World Colonial]

The commonly accepted definition of a recession is two consecutive quarters of negative GDP but there are also (I believe) many economists who use an alternative definition which is more qualitative which includes a "substantial" decrease in the level of employment and production. The first is more objective but fails to capture the qualitative aspects of many recent economic "slowdowns".

 

I mean, is there really that much of a difference between two consecutive quarters of slighly negative GDP growth (say, -.1% to -.5%) versus two with slightly positive (.1% to .5%) growth? Probably not to most people but under the common definition, one is a recession and the other is not. But in both instances, there is or may be widespread economic duress. I do not believe it would be inaccurate to describe the current economy that way for a substantial minority or possibly a majority of the population today, and that is with supposedly moderate to favorable aggregate statistics. And if this is not an accurate description now, it soon will be if the credit problems continue or worsen.