Zeev's Turnips Patch-No Politics (ZEEV)

[ItsAllCyclical]

Zeev, I think you have to consider a few things w/respect to gold.

While the world is not going to return to a gold standard anytime soon, there are some countries that are moving back in that direction. Look at the introduction of the Malaysian Dinar. If more arab/muslim countries go that route the incremental increase in demand will be enough to send prices much higher (not counting the effects of a lower dollar from here). Just like oil and other commodities it's the incremental increase in demand/supply that sets the price. Back when oil prices where approaching $10 just a few years ago the worlds oversupply stood at less than 10%. Small changes in demand/supply can have a dramatic effect.

You also have the China factor. For the first time in over 60+ years they are now allowing their citizens to own gold and silver.

Lastly consider competitive devaluations. Richard Russel has mentioned this again of late as have others. Almost every country wants a lower currency now in this slow-growth environment. However, they must devalue against something. Ultimately hard assets will win in such a scenario as interest rates around the world push toward 0% and central banks print money like mad.

I do think that gold is largely tied to the US Dollar as you state, but there are enough other factors in place to make the gold bull robust over the next 5-10 years (imho).