Gold update: Gold over $1000 and still no gold bubble - Eric Janszen

[halcyon]

Re: Last hurrah?

Actually, he is saying that this time it will not collapse afterwards.

It doesn't have to, although I find the idea that it won't not only in 100% disagreement with history, but also a ludicrous idea from the point of view of economics of supply/demand.

But let's assume it will not collapse.

At some point it will stop appreciating against other assets in a REAL economy that grows. Gold doesn't give dividends. Other assets do, assuming there's still a real economy out there (i.e. some people alive and trading goods).

At that point you switch some portion (0-100%) of your wealth to that which grows in value.

My gain is to grow the assets, not just protect it.

[halcyon]

Re: Gold update: Gold over $1000 and still no gold bubble - Eric Janszen

Actually, he is saying that this time it will not collapse afterwards.

If you have an argument to make, please put it forward so we can discuss it.

Assuming somebody has NOT read something is just that - an assumption and it does not do well for you.

Maybe I should assume you have not read the following:

- Gold Standard Illusion, Kenneth Mouré (Oxford University Press)
- Gold Standard in Theory and History, Eichengreen (Routledge)
- Lever of Empire, Metzler (University of California Press)
- Glitter of Gold, Flandreau (Oxford University Press)
- The Power of Gold: The History of an Obsession, Bernstein (Wiley)

But I won't, because it would go beyond my ability to know.

[jk]

Re: Last hurrah?

It pays to read the contrarians who have a good argument:

1) Paulson is starting a gold fund. He's playing a bubble (phase2 and phase3 of a bubble)

2) Louise Yamada (TA) says gold is maybe in phase 2 of a bubble

3) Willem Buiter analyzes well how gold is just fiat as anything else today. Quoting Austrians from 30s does still not make gold de jure money. TODAY counts, not 70 years ago.

4) Julian Robertson (Tiger management) correctly points out that gold does not give interest. It is a safety hedge. It only rises in times of crises due to anticipation, hence a bubble. No inherent value. BTW, he's saying to buy gold miners instead of gold, if you want to get dividends. He disagrees 100% with Jim Rogers on this (who says: don't buy the miners)

5) Even Jim Sinclair says that you gotta exit a bubble before it bursts. He did in the previous one. He's not dumb enough to think that this time will somehow not be the same.

Pretty much the only people who are saying gold is NOT in a bubble or not getting there are gold-bugs: gold pushers, gold vault leasers, gold ETF owners, gold investors, gold advice peddlers, etc. In general people who can ONLY see gold as good and everything else as bad.

Now gee, who would I listen here?

This doesn't mean you can't make stupendous money riding a bubble. But you have to exit as well. Otherwise you never make money, only paper wins.

Being right for the wrong reasons does not warm at the end of the day, unless one can also exit.

And yes, I do trade in gold myself, but I don't "invest" in it for the long run. People who are better at it than myself may well do that (ref: Jim Sinclair), but even they know when to exit.

Just food for thought.

1. do you define every bull market as a bubble? i think that's a definitional problem here.

2. no one here has, to my knowledge, suggested that the holding period for gold is forever. imo it is likely to be at least several more years, however.

3. i started buying gold when it was 380, back in '03. so i've now owned it 6 years, and i expect to continue owning it another 3-6 years, as a rough guess. you want to call that trading or investing?

[aaron]

Re: Last hurrah?

read the articles here then comment, else look stupid.

uncool

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[xela]

Re: Last hurrah?

It doesn't have to, although I find the idea that it won't not only in 100% disagreement with history, but also a ludicrous idea from the point of view of economics of supply/demand.

When you say history, which period are you refering to?

I'm of the opinion that we are very early in the cycle, so what to do best next is, even if you could form your strategy today, still years off.

Alot depends on whether gold will be remonetized. It looks that way, this implies no collapse afterwards and also keeping part of your wealth in it.
If it's not going to be remonetized then knowing when to exit from the bubble will be very difficult, worth its weight in gold

PS: I guess your response to metalman erroneously quotes my first response.

[metalman]

Re: Gold update: Gold over $1000 and still no gold bubble - Eric Janszen

If you have an argument to make, please put it forward so we can discuss it.

Assuming somebody has NOT read something is just that - an assumption and it does not do well for you.

Maybe I should assume you have not read the following:

- Gold Standard Illusion, Kenneth Mouré (Oxford University Press)
- Gold Standard in Theory and History, Eichengreen (Routledge)
- Lever of Empire, Metzler (University of California Press)
- Glitter of Gold, Flandreau (Oxford University Press)
- The Power of Gold: The History of an Obsession, Bernstein (Wiley)

But I won't, because it would go beyond my ability to know.

i'm frustrated. i've had it. enough of this shit.

you do realize that every argument that you make was either made here 10 yrs ago or demolished since then. why rehash it?

neophytes have called gold a 'bubble' at $400, $500, $600... etc. they don't understand. all they have to do is read the articles here.

if you had, you'd never ask these questions. but since you'e too lazy to read them...

1) Paulson is starting a gold fund. He's playing a bubble (phase2 and phase3 of a bubble)

he's a ******* idiot. it's not a 'phase 1' or 'phase 2' of a bubble.

read the articles here to learn why.

2) Louise Yamada (TA) says gold is maybe in phase 2 of a bubble

another ******* idiot. where was louis in 2001 when janszen explained why gold was gonna go up? why are analysits who've been wrong, wrong, wrong on gold or absent over the last 8 years now suddenly a pack of experts?

read the articles here if you want to know what's gonna happen.

3) Willem Buiter analyzes well how gold is just fiat as anything else today. Quoting Austrians from 30s does still not make gold de jure money. TODAY counts, not 70 years ago.

just like the itulip view... but you'd know that if you bothered to read anything here. gold is money because gov't said it was... to collect taxes. period. all this 'gold is natural money' crap is crap.

read the articles here to learn about it.

4) Julian Robertson (Tiger management) correctly points out that gold does not give interest. It is a safety hedge. It only rises in times of crises due to anticipation, hence a bubble. No inherent value. BTW, he's saying to buy gold miners instead of gold, if you want to get dividends. He disagrees 100% with Jim Rogers on this (who says: don't buy the miners)

duh. gold up 260% vs s&p off 8% since 1998. 'oh, what about dividends'? whined the lying sack of shit stock shills. fine. add 30% to the -8%. now you got 22% vs 260%. big ******* deal. jim rogers is 100% correct. buy the stuff not the miners. you'll never, ever, ever, ever pick the right miners to beat a 10 yr buy and gold of gold in a bull market. never. impossible. no one has done it. only liars claim otherwise and only cretins believe them.

5) Even Jim Sinclair says that you gotta exit a bubble before it bursts. He did in the previous one. He's not dumb enough to think that this time will somehow not be the same.

duh. duh. duh. of course gold doesn't go up forever. janszen will tell us when to exit. jim's too emotional. how many 'THIS IS IT!' end of the world warnings does he plan to issue, anyhow?

who do you trust? the guy who got into gold in 2001 & stayed in through every ******* stupid 'deflation' call for the past 8 yrs or some assclown who got in a year or two ago... or got in early but ran back and forth between bull and bear positions like a squirrel crossing a highway ever since?

you are here... so avail yourself of the info here.

really, read the articles. else, why are you here? to 'teach' us?

you are but one of a long, long line of newbees that come here to try to uneducate us... if we want to get uneducated, we'll watch tv not hang out here. thanks for your 'input'.

[grapejelly]

Re: Gold update: Gold over $1000 and still no gold bubble - Eric Janszen

People have no idea what a bubble is like.

I lived through the gold bubble of 1979-1980.

Gold was what people talked about at parties.

Gold was quoted everywhere.

Ordinary people knew about gold and silver prices.

People who had gold or silver to sell would wait weeks for an assay because the smelters were backed up unbelievably. BTW, if you wanted to sell a bar, you were out of luck because it took too long to get the assay done and nobody wanted to bother.

Rare coins, jewelry, all was melted down at the smelters, without discrimination. This was a mad panic to buy gold and silver.

This is NOTHING like a bubble. Sure there is more interest in gold because it has gone up.

Sentiment FOLLOWS price.

But so what?

There is no widespread public participation in gold. The total market cap of GLD is a fraction of the S&P500 market cap.

The "man in the street" is selling gold today because he needs the money.

Those buying gold are the smart money including central banks, wealthy people. And they have not BEGUN to buy gold.

Gold will go up hundreds of times what it is today when this is truly a bubble. And this time, the bubble will correspond with the complete collapse of the USD IMHO.

That's why I tell people I know to buy gold and silver. Today's prices are nothing compared to what we will see.

[jk]

Re: Gold update: Gold over $1000 and still no gold bubble - Eric Janszen

there are 2 all news a.m. stations in nyc. during the late '70s each one announced the price of gold every 30 minutes [wcbs at 25 and 55 after the hour, wins at 26 and 56 after the hour] as part of their regular business segments. i'll worry it's a bubble when that starts happening again.

[metalman]

Re: Gold update: Gold over $1000 and still no gold bubble - Eric Janszen

People have no idea what a bubble is like.

I lived through the gold bubble of 1979-1980.

Gold was what people talked about at parties.

Gold was quoted everywhere.

Ordinary people knew about gold and silver prices.

People who had gold or silver to sell would wait weeks for an assay because the smelters were backed up unbelievably. BTW, if you wanted to sell a bar, you were out of luck because it took too long to get the assay done and nobody wanted to bother.

Rare coins, jewelry, all was melted down at the smelters, without discrimination. This was a mad panic to buy gold and silver.

This is NOTHING like a bubble. Sure there is more interest in gold because it has gone up.

Sentiment FOLLOWS price.

But so what?

There is no widespread public participation in gold. The total market cap of GLD is a fraction of the S&P500 market cap.

The "man in the street" is selling gold today because he needs the money.

Those buying gold are the smart money including central banks, wealthy people. And they have not BEGUN to buy gold.

Gold will go up hundreds of times what it is today when this is truly a bubble. And this time, the bubble will correspond with the complete collapse of the USD IMHO.

That's why I tell people I know to buy gold and silver. Today's prices are nothing compared to what we will see.

thank you. a voice of reason. thank you.

people have no historical perspective.

history to them is what they saw on tv last night and have already forgotten.

[jiimbergin]

Re: Gold update: Gold over $1000 and still no gold bubble - Eric Janszen

People have no idea what a bubble is like.

I lived through the gold bubble of 1979-1980.

Gold was what people talked about at parties.

Gold was quoted everywhere.

Ordinary people knew about gold and silver prices.

People who had gold or silver to sell would wait weeks for an assay because the smelters were backed up unbelievably. BTW, if you wanted to sell a bar, you were out of luck because it took too long to get the assay done and nobody wanted to bother.

Rare coins, jewelry, all was melted down at the smelters, without discrimination. This was a mad panic to buy gold and silver.

This is NOTHING like a bubble. Sure there is more interest in gold because it has gone up.

Sentiment FOLLOWS price.

But so what?

There is no widespread public participation in gold. The total market cap of GLD is a fraction of the S&P500 market cap.

The "man in the street" is selling gold today because he needs the money.

Those buying gold are the smart money including central banks, wealthy people. And they have not BEGUN to buy gold.

Gold will go up hundreds of times what it is today when this is truly a bubble. And this time, the bubble will correspond with the complete collapse of the USD IMHO.

That's why I tell people I know to buy gold and silver. Today's prices are nothing compared to what we will see.

I too lived through that true gold bubble. Even my 2 young children, 9 and 13 bought junk silver, although I probably have already mentioned somewhere that my very frugal 9 year old daughter made me sign a contract that said over the next 10 years she would make on the silver no less than she would have earned on her CD. Guess what in 1990 I bought back her silver at a price much higher than the then spot price! But I still have it now PM is not in a bubble today!

jim

[LargoWinch]

Re: Gold update: Gold over $1000 and still no gold bubble - Eric Janszen

...

Gold will go up hundreds of times what it is today when this is truly a bubble.

...

GJ, that was a great post.

I only lived through the dot com mania (yep, I was buying Nasdaq 4,000) and the ongoing RE mania here in Toronto (houses still sell in less than 24h with 20+ bids with the median detached selling for around 750 tr. oz of Gold).

But I disgress.

I think (and hope ) that Gold will go up, but I doubt it will be "hundred of times" the current price...that would mean $X00,000 / tr. oz!

Surely that is the worst/(best for some) case scenario! But I cannot imagine the Fed sitting idle and not raising rates however.

[Jay]

Re: Gold update: Gold over $1000 and still no gold bubble - Eric Janszen

GJ, that was a great post.

I only lived through the dot com mania (yep, I was buying Nasdaq 4,000) and the ongoing RE mania here in Toronto (houses still sell in less than 24h with 20+ bids with the median detached selling for around 750 tr. oz of Gold).

But I disgress.

I think (and hope ) that Gold will go up, but I doubt it will be "hundred of times" the current price...that would mean $X00,000 / tr. oz!

Surely that is the worst/(best for some) case scenario! But I cannot imagine the Fed sitting idle and not raising rates however.

You can make a very good case for it if the Fed raises rates, the economy tanks, the politicians and public scream for inflation (which they will), the real economy crumbles more, rinse and repeat a bunch of times, Shazaam Zimbabwe!

[jk]

Re: Gold update: Gold over $1000 and still no gold bubble - Eric Janszen

You can make a very good case for it if the Fed raises rates, the economy tanks, the politicians and public scream for inflation (which they will), the real economy crumbles more, rinse and repeat a bunch of times, Shazaam Zimbabwe!

zimbabwe is not the proud issuer of the world's reserve currency, and specifically the currency in which the saudi's et al price their oil. those facts put a lid on our potential inflation rate.

[Jay]

Re: Gold update: Gold over $1000 and still no gold bubble - Eric Janszen

zimbabwe is not the proud issuer of the world's reserve currency, and specifically the currency in which the saudi's et al price their oil. those facts put a lid on our potential inflation rate.

OK, so I took some liberties. You got me. ;) It was fun to write though and the thought process is correct, at least in my mind. Even if the reserve status keeps us out of Zimbabwe territory, inflation is going to continue for a while until it really hurts. What we have now isn't pain.

[WDCRob]

I wasn't paying attention to finance/markets/etc in 1980 on account of baseball and the discovery of strange new creatures known as "girls" - but I still remember hearing about gold.

To follow on Grape's point... compare what you hear about gold to what you heard about real estate four years ago. Not even close.

But people who know I bought some a few years ago have started contacting me about it out of the blue in the last few weeks and quoting the price to me. You can tell they're curious, and if it keeps going up I'd expect they'll jump in. That'll be the tip of the iceberg for the next big move IMO.