Wow gold up again, 1225 an ounce tonight, this trade has become so one sided it's got to the point where it seems there is no downside risk at all, I'm bullish on gold but the entire commodity bubble is starting to grow by the day. The next correction in the commodity space is going to be significant when it breaks. All the commodity bulls will ignore it until it breaks and then finally realize the bubble has popped after the 50%+ drop.
Bubble? Are you kidding me. In the 1700s when the South Sea company went from 128 pounds to 550 pounds in 5 months yeah thats a bubble. In 1979-80 when gold went from 250 to 850 in 1 year back in 79 yeh thats a bubble. In 1999-2000 when the nasdaq went from 1700 to 4800 in just 15 months, yeh thats a bubble. A bubble means irrational exuberance where a commodity/stock/whatever goes up MASSIVELY in a very shirt timeframe. Gold is up 36% YTD ... hardly a bubble. Oh but wait you might say its done well longer term. Yeh I wouldn't disagree but its still not a bubble. Longterm yeh its up from 250 in 2001 but that was 8 years ago... which makes a compounded rate of 22%pa. Again, hardly a bubble. When gold does something ridiculous, like 100-200% in a matter of months, then its not a bubble, just a solid performer. In my opinion only but as you can see I have studied the history well and my opinions are not baseless.
Excuse the poor spelling/grammar. When gold does something ridiculous, like 100-200% in a matter of months, then its not a bubble, just a solid performer. Is meant to say... When gold does something ridiculous, like 100-200% in a matter of months, then its a bubble, until then its just a solid performer.
It seems like there are only two questions to answer about the long term direction of the POG: 1) Will our Gov't ever stop coming up with new excuses to increase spending and the deficit? 2) Will the Fed keep printing money to buy the treasury debt that is now rolling over every 2 or so years as buyers are only looking for short term debt? 2) is very important as several websites, like zerohedge, are keeping a close eye on how much of the rollover debt the Fed buys. Unlike perhaps in the past, everyone will find out quickly if there is excessive monetization, perhaps causing a buying frenzy for gold.
Helicopter Bernanke has never run the printing presses like this before... ever. The value of the dollar is dying, and gold is its inverse. It's not going below $1000 again for a loooooooong time, but if it does, I am doubling my stash.
By seeing the poll I can conclude that it's true no more $... so gold could go back under 1200... but it will not be $... Nooooooo
By your definition oil wasn't a bubble either, yet it still managed to drop 70% within 6 months after the 2008 peak.