So, best case senario for you: gold goes to $999,999... so what? Gold is a play on ALL fiat collapse. If you're banking on solely a USD collapse, then you're going to be sorely disappointed when your ounce of gold gets you $999,999 dollars, but only 800 Euros. That was my point. If you want to short the dollar, short the dollar. IMO, gold is not a good way to play the dollar. All the gold bulls claiming the market is a bubble seem to be too blind to see that gold is following right behind it. Maybe they'll pop together, I don't know. Let's be honest, ET is the perfect representation of "dumb money," and dumb money is PILING into gold longs by the boat load. It's due for at least a short-term collapse.
I respectfully disagree. The US is not the only country with debt problems who is printing money: http://www.economicpolicyjournal.com/2009/05/now-euro-money-supply-out-of-control.html Many debtor nations around the world are printing money to pay their bills. They do not care if the value of their currency goes down. It is a race to the bottom because the G-20 may eventually agree upon one new world currency. People around the world are buying gold and silver, not just those who own US dollars. The price of gold is going up faster in US dollars, but it is also rising in Euros: http://www.usagold.com/gold-price.html
My mother who never bought a single share of any stock gave me a hot tip: buy gold. It's 1999 again where everybody is an expert. Time to short.
Ok, fair enough I mis-interpreted your betting the farm. I don't as a rule buy in these markets because it becomes momentum. There is no basis of gold. It is an arbitrary measure, just like money is an arbitrary measure. Money works best when it is kept in motion. It is not intended to be accumulated since then it slows down an economy. Thus gold with its habit of being accumulated is slowing down the economy and is worth something only on paper. The moment it is sold it looses value.
Check out the history of Canada and in particular 1992. Canada was facing the exact same scenario. How did Canada solve it? The commodity bull market, yes. But that was only around 2000 and a bit later. Canada did what they had to, and that was cut, cut, cut! For example if America cut its military budget in half, hey there would be savings of 350 billion. And what if the Tarp money was paid back? Hey look at Bloomberg on how the Fed is asking the banks to come up with a plan to quickly pay back the Tarp. In other words the wheels have already been moved in the right direction. So if you want keep buying gold. But you will see five years from now America will be back.
People quickly forget how many got burned and buried trying to pick a top in oil 2007/2008. Don't short stuff that's going up. If anything, buy put options, then all you can lose is the premium you're long. When (if ever) gold unravels, there will be plenty of time to establish outright short positions with much better risk/reward ratios than today. No need trying to pick the top tick.
People often frown upon gold because it has no industrial use limiting potential demand but at the same time like to compare the rise in oil of 08 to the rise in gold of today. The difference obviously is in theory unlike high oilprices high goldprices hurt no one except perhaps the credibility of central banks and their currency. That makes for quite the adversary no doubt whome will certainly have a few more tricks up their sleeve but nevertheless I'd have a hard time imagining global riots because gold is at 2k as we had when oil peaked last summer.