Here are two charts, one that presents the main stages in a bubble and one that displays the price of gold over the past 15 years:
Discuss.
Discuss.
Gold Bubble?
- Thread starter charlie.simm
- Start date
By saying this, aren't you basically implying that "this time it's different" or that we're dealing with a "new paradigm"... see what I did there? :anon.sml:
You can't print real estate either but there are real estate bubbles in pretty much all countries every now and then.
Gold is probably highly leveraged as well.
I'm holding some gold myself and wouldn't sell it for the next 10 years, but that's rather just a hedge.
In your chart, where do you see a major bubble busting? $1800 to $1600 levels is a downside but not a bubble.
There is always time value of money which people often ignore. Whats worth $100 today, is worth $200 next year. Don't look at relative price of gold just by looking at the price, you need factor in inflation, time value and USD vs Gold valuation to determine the real value of gold
Remember when your dollar note becomes a tissue paper, all that is worth will be gold.
There is always time value of money which people often ignore. Whats worth $100 today, is worth $200 next year. Don't look at relative price of gold just by looking at the price, you need factor in inflation, time value and USD vs Gold valuation to determine the real value of gold
Remember when your dollar note becomes a tissue paper, all that is worth will be gold.
I think his point is that gold is a commodity that cannot be produced. Money can be printed. Houses can be built, but there are limited amounts of gold on earth that can be extracted.
India and China love gold, it's been part of their culture for thousands of years. Therefore the demand will always be high, and the supplies limited. I'm no financial analyst, but based on these simple facts I can't see how gold prices can go down.
It will be stable for awhile... Although I love the chart, it's close.
Also can't compare it to the housing market bubble. With that they gave out loans to everyone doing illegal approvals, etc. But Gold isn't something that can be readily supplied to drop the demand overnight, it can't just crash that fast. It might start falling back down, but we won't see drops that large. At least those are my thoughts.. But I would not invest in Gold right, awhile a go was it's prime.. I'm more of a invest in the same stock for 40 years kind of guy.
Also can't compare it to the housing market bubble. With that they gave out loans to everyone doing illegal approvals, etc. But Gold isn't something that can be readily supplied to drop the demand overnight, it can't just crash that fast. It might start falling back down, but we won't see drops that large. At least those are my thoughts.. But I would not invest in Gold right, awhile a go was it's prime.. I'm more of a invest in the same stock for 40 years kind of guy.
We won't have a significantly greater supply of gold until we start mining asteroids or other planets that have gold. That is a very, very long ways away. Gold is probably not going to crash anytime soon - if anything the demand for gold will probably increase for a variety of reasons (protecting wealth?)
Gold will be in the bubble phase when there are three or more gold posts per day in STS.
Seriously though, gold is nowhere near it's top. It's going to many thousands of dollars per ounce. If it's remonetized, which seems likely, then the dollar value becomes fairly irrelevant. Think of it more in terms of purchasing power, i.e. how much oil, real estate, etc it will buy.
Gold and silver ftw. Silver is going to be a huge winner, and it's insanely undervalued at this point. Above ground silver may actually be in shorter supply than gold at the moment, and it's an irreplaceable industrial metal.
My $.02.
Seriously though, gold is nowhere near it's top. It's going to many thousands of dollars per ounce. If it's remonetized, which seems likely, then the dollar value becomes fairly irrelevant. Think of it more in terms of purchasing power, i.e. how much oil, real estate, etc it will buy.
Gold and silver ftw. Silver is going to be a huge winner, and it's insanely undervalued at this point. Above ground silver may actually be in shorter supply than gold at the moment, and it's an irreplaceable industrial metal.
My $.02.
Any proof that it's lower in supply than gold (chemically impossible) or that it's irreplaceable (and not just useful) in industry?
Well, after John Paulson covered on his CDS bet and pulled off the greatest trade ever, he became increasingly bearish on the dollar and then on other currencies, leading him to conclude gold was ripe. This was 2009ish I think, and to the best of my knowledge he didn't cover that because supply of dollar continues to increase and inflation hasn't exploded yet as he expected.
Yes gold is in a bubble, as is everything eventually that can be bought or sold. Most of my worth is in .com domains, just another commodity (of sorts), and only time will tell if that will prove to be adequately inflation resistant.
Yes gold is in a bubble, as is everything eventually that can be bought or sold. Most of my worth is in .com domains, just another commodity (of sorts), and only time will tell if that will prove to be adequately inflation resistant.