Gold: The Next Bubble

[pellegrino]

In my claims, I'm not saying that gold won't go up in the future. I'm just saying I personally don't see the value of gold especially in a tough economy when people are less likely to buy jewelry. It is pretty obvious that most people who currently own gold or are looking to buy it don't have my same opinion.

Oh, I agree with you. Gold was a good buy in August and early September of 2008 and then again for a brief window in November 2008, since then it's been overvalued. I think it will come down, it's just a matter of how high it gets before it does.

[kccougar]

So how much is my high school class ring worth?

[pellegrino]

I have a co-worker you likes to say "Invest in Guns and ammo."

He is half-joking.

I guess it is the ultimate hedge.

So that's what you meant by copper.

[Color Me Badd Fan]

Is this adjusted for inflation. It looks like gold was around $200 per ounce back in the mid 70s before inflation really hit and the spike occurred. The price looks like it went back down to around $400 and stayed steady for the next 22-24 years and then spiked again. Gold was a great investment in 2006, it's not a great investment now. Like oil, it will settle a lot higher than the steady price it previously had. Oil was something like $30 per barrel for years before 2004. In 2008 it got up to $148. Now it fluctuates between $60 and $80 and those prices seem to be here to stay.

[byu71]

[QUOTE=pellegrino;359928]I'm not sure what to make of gold. It's definitely looking like a bubble, but demand has decreased in Q1 of 2010 from what it was in Q1 2009 and yet the price has increased almost $500 since then. QUOTE]


I am sure you know this, but I will say it for a few on here who don't realize this. Prices can go up due to a lack of supply as well as increasing demand. It could be more people want to hold onto their gold.

I read somewhere that the Chinese were buying Gold and Oil and the sense was that forecasts higher prices. Why would anyone assume the Chinese were doing it for anything except perhaps balancing out what they are holding. It may be entirely for purposes related to their economy and not a forecast of doom ahead.

Even if they were forecasting something, why would one necessarily think they will be right.

[Color Me Badd Fan]

Here's the inflation adjusted price for gold through October 2009. The current price is around $1200, or $150 more than the peak price through last October.

[Uncle Ted]

I read somewhere that the Chinese were buying Gold and Oil and the sense was that forecasts higher prices. Why would anyone assume the Chinese were doing it for anything except perhaps balancing out what they are holding. It may be entirely for purposes related to their economy and not a forecast of doom ahead..

Not only has the Chinese government been buying gold but they are urging their citizens to buy gold. Maybe they will also be installing these gold vending machines.

[byu71]

Not only has the Chinese government been buying gold but they are urging their citizens to buy gold. Maybe they will also be installing these gold vending machines.

Have they been encouraging them to buy gold through Goldline. Maybe congressmen Weiney will be going after the Chinese government next.

[statman]

The dollar has been weak, but what happens if/when the Euro collapses? Does the devaluation of the dollar become muted by the devaluation of other major currencies? If so, does that undercut the increase in gold prices?

I doubt it. The euro weakening doesn't necessarily strengthen the dollar in real terms (v gold or other commodities). The real value of the dollar could strengthen a bit - it's always been the "safe-haven" currency - but the fact that our debt is out of control and that the Fed & Treasury created a couple trillion dollars by fiat, doesn't help the real value of our currency v gold, regardless of how worthless the Euro is...

[statman]

I have a co-worker you likes to say "Invest in Guns and ammo."

He is half-joking.

I guess it is the ultimate hedge.

Add food to the mix, and I'm right there with him.

half-joking, of course...

[Moliere]

Here's a question that I've been wondering. If you buy gold from Goldline (or some other dealer whether endorsed by Bro. Beck or not) are you really buying a piece of gold or are you buying some quasi-security that is tied to the price of gold?

[statman]

Here's a question that I've been wondering. If you buy gold from Goldline (or some other dealer whether endorsed by Bro. Beck or not) are you really buying a piece of gold or are you buying some quasi-security that is tied to the price of gold?

Pretty sure goldline is actual gold - "the ultimate hedge."

As a hedge, in a diversified portfolio, I'd agree with them - there is a place for gold. As a long-term stand-alone investment, gold sucks...

[SteelBlue]

Thought this was a good read.

http://online.wsj.com/article/SB1000...477689760.html

It's a currency "substitute," but it's useless. In prison, at least, they use cigarettes: If all else fails, they can smoke them. Imagine a bunch of health nuts in a nonsmoking "facility" still trying to settle their debts with cigarettes. That's gold. It doesn't make sense.

As for being a "store of value," anyone who bought gold in the late 1970s and held on lost nearly all their purchasing power over the next 20 years.

[Surfah]

Those Hoffman's are going to be pissed.

[Bo Diddley]

And guns.

So when they start coming for your guns, do they go up in value due to scarcity, or down because they're no longer legal?