Gold closed at $999 on Tuesday. Then, yesterday, it closed down $2. There’s a time to buy gold; and there’s a time to sell it. Which time is it? The question rose with the gold price itself. It needs an answer.

The price of gold today, adjusted for inflation, is about where it was 26 years ago. After peaking out at nearly $2,000 (again, in 2009 dollars), in 1980, the price fell to the $1,000 level (in today’s money) in 1983.

We were gold bulls back then. And we were idiots. It was the end of the gold bull cycle, not the beginning. The gold price fell for the next 17 years.

Some people draw the wrong lesson from this experience – that gold is always a bad place for your money.

Today’s Financial Times:

“In spite of low interest rates, that make owning gold cheap, the opportunity cost of owning it is

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Wells Fargo chief economist John Silvia says the economy is rebounding, but he is concerned about inflation.

“I think it (the recession) is winding down,” he told Moneynews’s Dan Mangru in an exclusive interview.

“I think we’re in an economic recovery. We’ll know that when we see some of the GDP numbers for next quarter.”

The second-quarter GDP figures showed “a pick-up in domestic demand across a lot of different sectors,” Silvia says. “It’s still fairly weak in some (sectors), but especially there’s some momentum going forward, and that was absolutely key.”

Click here or on the video below to view the interview.

Click here for the full article.

Source: Dan Weil, Moneynews.com, August 6, 2009.

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This post provides links to a number of interesting articles I have read over the past few days (while touring through Switzerland) that you may also enjoy.

• Samuel Brittan (Financial Times): A new guide for the perplexed, July 10, 2009. Attempts to make sense of the financial crisis often lead to even more confusion, writes Samuel Brittan. Here is an attempt to outline the main issues.

• Beat Balzli and Michaela Schiessl (Spiegel): Global banking economist warned of coming crisis, July 8, 2009. William White predicted the approaching financial crisis years before 2007’s subprime meltdown. But central bankers preferred to listen to his great rival Alan Greenspan instead, with devastating consequences for the global economy.

• Janet Morrissey (Time): Advice from an economist who saw 1929, July 9, 2009. The Obama Administration should stop bailing out corporate disasters and

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.S. gross domestic product (GDP) plunged at a surprisingly sharp 6.1% annual rate in the first quarter, marking its worst performance in 50 years, the Commerce Department reported today (Wednesday). The drop was much steeper than the 4.9% annual rate expected by economists and follows a 6.3% tumble in the fourth quarter of 2008. But a look inside the numbers shows that things may not be as bad as they look. Plummeting exports and massive inventory reductions accounted for most of the fall. And increases in government and consumer spending have some analysts convinced the future looks much brighter. “This is one of those good-bad numbers,” Joel Naroff, president of Naroff Economic Advisors Inc. in Holland, Pa, wrote in a note to investors. “Businesses are running about as lean as they possibly can be. It sets up the reality that any sort of ...

This post is a guest contribution by John Silvia*, chief economist of Wachovia.

Three issues keep us up at night. They are the basis of what we see as fundamental movements in the economic sphere that are being met by policy makers in only a superficial way. Over the last year, we have repeatedly seen that these superficial monetary and fiscal policy moves have been ineffective in dealing with the three issues we will address here. We believe policy is piling on the Band-Aids while the source of the bleeding is left unattended.

Economics: more than just the business cycle First, current economic difficulties reflect both cyclical and structural forces. Policy makers emphasize the traditional “Keynesian response” to a sudden drop in aggregate demand. There is an emphasis

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Last week’s gold rally has fizzled out. But Ed Bugos says we could be in line for very bullish move. Outside of Japan, countries are inflating rapidly, which is extremely bearish for paper currency. And the supply and demand fundamentals of physical gold remain bullish.

More from The Daily Reckoning:

The late November rally in gold prices wasn’t quite as spectacular as mid-September’s gain, but it was still impressive. There was good follow-through too, though the momentum softened as bulls knocked on resistance near $850.

The rally was a no-brainer. There is a strong line of support at $700, which was resistance during 2006 and the first half of 2007. Moreover, the market was, and is, oversold.

The catalyst was news that the U.S. government had to bail out Citigroup (NYSE:C), the world’s largest bank by revenues. The event has given way to new concerns about the economy, which weighed on

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