GOLD is a BUBBLE (Nadler and Roubini)

[jtabeb]

ROTFLMAO!!:p

How many logical fallacies can you spot in this piece?

http://www.commodityonline.com/futur...nce-13613.html


Current gold price should be $2163 per ounce

December 28, 2009 15:50:00 IST

For the second time in 30 years, we're in the midst of a classic gold bubble.

There are "gold parties" akin to Tupperware parties across the U.S., where people trade in their gold jewellery and even gold dental fillings for cash.

"Goldbugs," the term for gold-investing zealots, are predicting a gold price of $2,000 (all figures U.S.) per ounce next year. And a rise to as high as $15,000 in years to come – a 15-fold increase over the modern-day record price of $1,086 set on Dec. 3, from which gold has since retreated 11 per cent.

Gold Bubble Debate: Is it wise to invest in gold?

U.S. talk-radio yakkers Glenn Beck and Watergate ex-convict Gordon Liddy have become paid shills for gold vendors. On behalf of an outfit called Rosland Capital, Liddy in TV spots describes gold as "an intrinsically valuable liquid preserver of purchasing power."

Bank of Nova Scotia, one of the world's largest precious metals dealers, has launched an online store for sales of Scotia Gold Bars and other gold items. Such is gold's demand among everyday folks, as the Star's Rita Trichur reported last week, that the U.S. Mint has suspended sales of its popular American Eagle one-ounce gold coin for lack of supply. The Royal Canadian Mint has some of its most popular gold coins on back order.

These are all classic "sell" signs.

And a few sages finally are beginning to say as much.

Jon Nadler, senior analyst at Kitco Metals Inc., says gold has been riding a "bubble" of "hot air." The Montreal gold expert, noting gold's historic role as a hedge against the world going to hell in a hand basket, warns: "Don't get carried away with scenarios of Mad Max," referring to the film set in an apocalyptic future.

[slp842]

Re: GOLD is a BUBBLE (Nadler and Roubini)

Nobody can really believe this guy. One simple study session from ANYBODY blows his case out of the water. I really love the "gold is unlimited and dollar finite" ploy. LOL.

[skidder]

Re: GOLD is a BUBBLE (Nadler and Roubini)

No-Nads Nadler is one of the biggest dolts in the investment world,IMO. It boggles the mind why Kitco would have this guy working for them. He has bad-mouthed gold since it was trading at $500/oz (that I'm aware of) and probably earlier. It is suggested that Kitco is actually very short gold with their pool accounts and is why they have this guy bad-mouthing their product, who knows?

So the public is selling gold in these "gold parties" and this is why gold is in a bubble???? amazing logic.

Why is it considered normal for cars, houses, tuition, etc to gain in price yoy, but gold is supposed to stay at some fixed price for decades on end and never adjust for inflation? Where is the logic in that? How come no financial commentators ever point that out (that I'm aware of)?

[GRG55]

Re: GOLD is a BUBBLE (Nadler and Roubini)

ROTFLMAO!!:p

How many logical fallacies can you spot in this piece?

http://www.commodityonline.com/futur...nce-13613.html


Current gold price should be $2163 per ounce

December 28, 2009 15:50:00 IST

For the second time in 30 years, we're in the midst of a classic gold bubble.

There are "gold parties" akin to Tupperware parties across the U.S., where people trade in their gold jewellery and even gold dental fillings for cash.

"Goldbugs," the term for gold-investing zealots, are predicting a gold price of $2,000 (all figures U.S.) per ounce next year. And a rise to as high as $15,000 in years to come – a 15-fold increase over the modern-day record price of $1,086 set on Dec. 3, from which gold has since retreated 11 per cent.

Gold Bubble Debate: Is it wise to invest in gold?

U.S. talk-radio yakkers Glenn Beck and Watergate ex-convict Gordon Liddy have become paid shills for gold vendors. On behalf of an outfit called Rosland Capital, Liddy in TV spots describes gold as "an intrinsically valuable liquid preserver of purchasing power."

Bank of Nova Scotia, one of the world's largest precious metals dealers, has launched an online store for sales of Scotia Gold Bars and other gold items. Such is gold's demand among everyday folks, as the Star's Rita Trichur reported last week, that the U.S. Mint has suspended sales of its popular American Eagle one-ounce gold coin for lack of supply. The Royal Canadian Mint has some of its most popular gold coins on back order.

These are all classic "sell" signs.

And a few sages finally are beginning to say as much.

Jon Nadler, senior analyst at Kitco Metals Inc., says gold has been riding a "bubble" of "hot air." The Montreal gold expert, noting gold's historic role as a hedge against the world going to hell in a hand basket, warns: "Don't get carried away with scenarios of Mad Max," referring to the film set in an apocalyptic future.

Here's an alternate view from John Hathaway, titled "A Contrarian's Dilemma" and presented in his usual well constructed style.

[Apologies if someone has already posted this elsewhere]

[jtabeb]

Re: GOLD is a BUBBLE (Nadler and Roubini)

Here's an alternate view from John Hathaway, titled "A Contrarian's Dilemma" and presented in his usual well constructed style.

[Apologies if someone has already posted this elsewhere]

What's the dilemma?

That more and more people are realizing the true value of fiat?

That people are realizing that the markets are well and truly rigged?

That monetary authorities are redoubling their efforts to maintain price suppression schemes on the PM exchanges?

That the value of a fiat currency eventually returns to it's intrinsic value (zero).


What dilemma again?:rolleyes:

[Starving Steve]

Re: GOLD is a BUBBLE (Nadler and Roubini)

A U.S. $20 gold piece (pre-1934) has 0.9675 troy ounces of pure gold in it, worth $1064 when gold is $1100 per oz on the spot market. So that means one $20 gold piece is worth 53+ times its face value, and the coin circulated at its face value prior to the recall in April 1933 in the U.S.

According to this kind of market economics, the gold market is saying that prices are going to be up by 53 times what the price level was in 1933. That means, one hell of a lot of future inflation is already discounted into the price of gold at the current time.

But what happens to the gold price if inflation is kept in check, maybe kept below 2% per annum? Especially, what would happen to the gold price if interest rates go up to 3% real return on capital? Would not the inflation premium in the gold price come off? And if that were to happen, what would the price of gold be?

Yes, if all world fiat money goes to zero, then the gold price is a bargain now at $1100 per ounce. But what if that inflation scenario does not develop? Might gold be the next bubble to burst?

When $20 is worth $1064 in currency, one has to be asking some questions in this market.:rolleyes:

[jtabeb]

Re: GOLD is a BUBBLE (Nadler and Roubini)

A U.S. $20 gold piece (pre-1934) has 0.9675 troy ounces of pure gold in it, worth $1064 when gold is $1100 per oz on the spot market. So that means one $20 gold piece is worth 53+ times its face value, and the coin circulated at its face value prior to the recall in April 1933 in the U.S.

According to this kind of market economics, the gold market is saying that prices are going to be up by 53 times what the price level was in 1933. That means, one hell of a lot of future inflation is already discounted into the price of gold at the current time.

But what happens to the gold price if inflation is kept in check, maybe kept below 2% per annum? Especially, what would happen to the gold price if interest rates go up to 3% real return on capital? Would not the inflation premium in the gold price come off? And if that were to happen, what would the price of gold be?

Yes, if all world fiat money goes to zero, then the gold price is a bargain now at $1100 per ounce. But what if that inflation scenario does not develop? Might gold be the next bubble to burst?

When $20 is worth $1064 in currency, one has to be asking some questions in this market.:rolleyes:

The goal here was to try and spot the logical fallacies presented in the article, not to add your own additional ones.

[Mega]

Re: GOLD is a BUBBLE (Nadler and Roubini)

http://www.zerohedge.com/article/ban...ld-ignore-them

Mike

[jimmygu3]

Re: GOLD is a BUBBLE (Nadler and Roubini)

So the public is selling gold in these "gold parties" and this is why gold is in a bubble???? amazing logic.

My thought exactly. So if the public were instead having parties in which the host opened up a box of random gold items and sold them to eager neighbors for cash, that would indicate gold was not in a bubble?

The gold parties are there because gold is the last thing of value the wealthy can extract from the desperate working class. Used household items are selling dirt cheap because there are way more sellers than buyers within the middle class. Wealthy people don't want a used treadmill, a beaten-up art deco armoire, or a 3-bedroom ranch, but they're more than happy to buy your gold at a handsome discount to spot!

Jimmy

[hayekvindicated]

Re: GOLD is a BUBBLE (Nadler and Roubini)

A U.S. $20 gold piece (pre-1934) has 0.9675 troy ounces of pure gold in it, worth $1064 when gold is $1100 per oz on the spot market. So that means one $20 gold piece is worth 53+ times its face value, and the coin circulated at its face value prior to the recall in April 1933 in the U.S.

According to this kind of market economics, the gold market is saying that prices are going to be up by 53 times what the price level was in 1933. That means, one hell of a lot of future inflation is already discounted into the price of gold at the current time.

But what happens to the gold price if inflation is kept in check, maybe kept below 2% per annum? Especially, what would happen to the gold price if interest rates go up to 3% real return on capital? Would not the inflation premium in the gold price come off? And if that were to happen, what would the price of gold be?

Yes, if all world fiat money goes to zero, then the gold price is a bargain now at $1100 per ounce. But what if that inflation scenario does not develop? Might gold be the next bubble to burst?

When $20 is worth $1064 in currency, one has to be asking some questions in this market.:rolleyes:

what was the size of the US Government's unfunded liabilities in 1933? Was there even such a thing? What is the size of the US Government's unfunded liabilities in 2009?

what gold was worth in 1933 is irrelevant. Oil was selling at 10 cents a barrel in the depression. What is oil selling at today?

Gold is NOT an inflation hedge. Its a hedge against the US Government (or any government for that matter). If you believe (hand on heart) that the US Government can honour unfunded liabilities in excess of $100 trillion (without printing money), then hoard dollars and believe that inflation will run at 2 percent per year. If you don't believe it will, you buy gold. Its that simple.

Having said that, Im done with buying gold for now. All my purchases were $900 an ounce and below. Im not buying more unless the price dropped below $1000 an ounce. But that doesn't mean I am hoarding fiat - I will probably buy ags or coal or something else which is still underpriced.

[Starving Steve]

Re: GOLD is a BUBBLE (Nadler and Roubini)

Nobody can really believe this guy. One simple study session from ANYBODY blows his case out of the water. I really love the "gold is unlimited and dollar finite" ploy. LOL.

As the price of gold works its way higher, the supply of gold from low-grade gold deposits in old gold mines, gold-tailings at all gold mines, trash heaps of electronics goods and circuit boards in dumps, people selling jewelry, junk gold dust mixed with iron filings, copper, silver, nickel, solder, and other crap from manufacturing jewelers, and even gold taken out of sea-water puts a lid on the price. And then we have the potential of central banks to start selling again, even the U.S. selling gold out of Ft. Knox. Collectable gold coins start to come out onto the gold market for their gold melt.... All kinds of things happen.

Just like post-peak oil, tar sands start to be developed. Under-sea oil deposits become developed. Bio-fuels come onto the market. Fuel efficiency eats into demand for oil. And new kinds of oil recovery methods are developed such as side-a-ways oil drilling in fractured shale. Drive the price of oil high enough, and coal-to-oil (synthetic oil) puts a lid on the oil price. Natural gas replaces oil used to fuel buses and trucks. Similarly, natural gas replaces fuel oil and propane now used to heat many homes..... Again, all kinds of things happen.

Gold is not going to be a one-way street up. At best, gold like oil, would work its way erratically and gradually higher over the passage of decades. And even to do that--- gradually move higher--- a nut like Bernanke would have to be running the Fed for years to come..... A more likely scenario is that Bernanke would be replaced at the first sign of a dollar crisis or hyper-inflation. Already, the knives may be out for Bernanke in the U.S. Senate.

[skidder]

Re: GOLD is a BUBBLE (Nadler and Roubini)

As the price of gold works its way higher, the supply of gold from low-grade gold deposits in old gold mines, gold-tailings at all gold mines, trash heaps of electronics goods and circuit boards in dumps, people selling jewelry, junk gold dust mixed with iron filings, copper, silver, nickel, solder, and other crap from manufacturing jewelers, and even gold taken out of sea-water puts a lid on the price. And then we have the potential of central banks to start selling again, even the U.S. selling gold out of Ft. Knox. Collectable gold coins start to come out onto the gold market for their gold melt.... All kinds of things happen.

Just like post-peak oil, tar sands start to be developed. Under-sea oil deposits become developed. Bio-fuels come onto the market. Fuel efficiency eats into demand for oil. And new kinds of oil recovery methods are developed such as side-a-ways oil drilling in fractured shale. Drive the price of oil high enough, and coal-to-oil (synthetic oil) puts a lid on the oil price. Natural gas replaces oil used to fuel buses and trucks. Similarly, natural gas replaces fuel oil and propane now used to heat many homes..... Again, all kinds of things happen.

Gold is not going to be a one-way street up. At best, gold like oil, would work its way erratically and gradually higher over the passage of decades. And even to do that--- gradually move higher--- a nut like Bernanke would have to be running the Fed for years to come..... A more likely scenario is that Bernanke would be replaced at the first sign of a dollar crisis or hyper-inflation. Already, the knives may be out for Bernanke in the U.S. Senate.

There is about 163,000 metric tonnes of gold in existence today. Gold mines add about 2%/year. Almost all of that gold is still available for sale, unlike most commodities. Scrap gold and ramped up mine tailings (gold mining supply is supposedly dropping 7% yoy, btw) don't add substantially to the available supply of gold that is for sale (at the right price), which is virtually all of the gold that has ever been mined. This is the difference between gold and every other commodity that you may care to compare it with.
WRT your comment on $20 gold coins selling for $1100, gold was legally pegged at $20/oz until 1933 when it was revalued after the confiscation to $35/oz, IIRC. I don't understand the validity of comparing a pegged price with a free market price and then calculating an inflation rate to decide whether the current price is overvalued? The U.S. gov't still carries it's gold bullion at $42/oz valuation. Do you think that they'll ever sell it at that price because I'm ready to buy.

[Spartacus]

Anyone in the US want to file a complaint?

if you can show that Kitco is doing business or soliciting business in the US

complain to the SEC and FTC, maybe even an Attorney General or 2 that Nadler is not disclosing Kitco's positions (SHORT !!)
in Nadler's pieces.

You'll either get the truth or Nadler will STpU
(Shut The piehole Up)

There may just be a REASON (or several) that Kitco did not hire a US based mouthpiece.

Or everything is on the up and up

When they want to, the US authorities can be quite a pain in the tuckus.

[strittmatter]

Re: GOLD is a BUBBLE (Nadler and Roubini)

My thought exactly. So if the public were instead having parties in which the host opened up a box of random gold items and sold them to eager neighbors for cash, that would indicate gold was not in a bubble?

The gold parties are there because gold is the last thing of value the wealthy can extract from the desperate working class. Used household items are selling dirt cheap because there are way more sellers than buyers within the middle class. Wealthy people don't want a used treadmill, a beaten-up art deco armoire, or a 3-bedroom ranch, but they're more than happy to buy your gold at a handsome discount to spot!

Jimmy

Don't fret, if cognitive dissonance sets in later, the masters of alchemy are only more than happy to sell their gold back to them - sort of.




https://www.50dollarbuffalo.com/?mid=663799
These babies, coated with 31 milligrams of 24 karat dust = $1.14 +/- worth of gold per $20.00 coin. (marketing101 - if the ads are still running, they are still working)


I still like the other kind:
http://www.agcoinbullion.com/servlet...BUFFALO/Detail

Oh, and I've always wondered how http://www.cash4gold.com/ an apparent "hole-in-wall" outfit was able to justifiably plunk down half a $mill each for their superbowl ads in the past? Silent, silent partnership is not a new concept, I know.

[Starving Steve]

Re: GOLD is a BUBBLE (Nadler and Roubini)

There is about 163,000 metric tonnes of gold in existence today. Gold mines add about 2%/year. Almost all of that gold is still available for sale, unlike most commodities. Scrap gold and ramped up mine tailings (gold mining supply is supposedly dropping 7% yoy, btw) don't add substantially to the available supply of gold that is for sale (at the right price), which is virtually all of the gold that has ever been mined. This is the difference between gold and every other commodity that you may care to compare it with.
WRT your comment on $20 gold coins selling for $1100, gold was legally pegged at $20/oz until 1933 when it was revalued after the confiscation to $35/oz, IIRC. I don't understand the validity of comparing a pegged price with a free market price and then calculating an inflation rate to decide whether the current price is overvalued? The U.S. gov't still carries it's gold bullion at $42/oz valuation. Do you think that they'll ever sell it at that price because I'm ready to buy.

At $15,000 per ounce, the way some gold-nuts are talking, or even at $3000 per ounce, the way some in the gold market are talking, it may well be that sea-water is mined for gold. The gold in Ft. Knox may be sold, too. Even the worst of the mine tailings may come into operation. And small operators galore may enter into the gold re-cycling business to advertise for circuit boards and old electronic devices for their gold-salvage content.

Outrageously over-priced markets change everything by bringing new supply out of the woodwork and severely constraining demand. Markets are not one-way streets upward to the stars--- not for gold, not for oil, not for real estate, nor for anything.:rolleyes: