Gold in a bubble and/or going to $3,000

[nero3]

Re: Gold in a bubble and/or going to $3,000

Ok, but let me ask: why are you here again? If you're not interested in the iTulip thesis, or not interested in specifically arguing against it (or parts of it), what are you looking for? The point here is constructive criticism and sharing of information surrounding the iTulip thesis. If you're not here to do that, why bother?

Good question, however I have provided a lot of information on what might happen, if not a criticism you could take it as a challenge for you to say why it wont be so. ( a longer bull-market in stocks), gold could already have peaked. If it was to come down, I guess it could drop to 4-500 dollars in real terms ( after a final peak in gold I think 800 dollars will be hit relatively fast). If it looks like there won't be QE3 4 etc, because the economy already looks to strong, and the market is looking ahead at interest rates rises at the time QE2 expires, lets say housing starts to pick up too, look at construction demand, could surprise to the upside. Then imagine the dollar strengthen, The dollar is as low now as in 78, and 95 and 08 roughly, should it really move any lower? oil peaked when it was this low last time. Rather it seems sensitive to rise any minute if there is any good news, thereby gold is vulnerable as well. I seems to detect from these discussions that the psychology supporting gold is weaker now, and shorting silver almost looks like a sure thing.

[metalman]

Re: Gold in a bubble and/or going to $3,000

Good question, however I have provided a lot of information on what might happen, if not a criticism you could take it as a challenge for you to say why it wont be so. ( a longer bull-market in stocks), gold could already have peaked. If it was to come down, I guess it could drop to 4-500 dollars in real terms ( after a final peak in gold I think 800 dollars will be hit relatively fast). If it looks like there won't be QE3 4 etc, because the economy already looks to strong, and the market is looking ahead at interest rates rises at the time QE2 expires, lets say housing starts to pick up too, look at construction demand, could surprise to the upside. Then imagine the dollar strengthen, The dollar is as low now as in 78, and 95 and 08 roughly, should it really move any lower? oil peaked when it was this low last time. Rather it seems sensitive to rise any minute if there is any good news, thereby gold is vulnerable as well. I seems to detect from these discussions that the psychology supporting gold is weaker now, and shorting silver almost looks like a sure thing.

read all of your old posts... this is yet more random 'on one hand maybe this and the other hand that' posts you've put here for years... amounting to zilch.

no more responses from me... nothing here. have a nice life.

ps... you will like motley fool etc better & receive a warm welcome there.

[touchring]

Re: Gold in a bubble and/or going to $3,000

There was one sentence in the article "
"When the head of the World Bank starts talking about gold as part of a new global reserve currency, the era of the Treasury dollar standard is nearing an end."

What i'm thinking to myself: Or that gold is close to popping.

I see those kind of statements, and that you have so many Chinese common people hoarding commodities like copper in their back yard as a contrarian indicator. I see the arguments for a 1975-1980 like boom. I see the excellent trend in mining employment. That 75-80 outcome was in fact my main scenario in 2009, but now I'm no longer sure about that outcome. Look at Ford. Did ford rally like that in the seventies? It's just anecdotal, but it's many pieces that's not fitting the picture. In the seventies, gold pulled back in the 74-75 recovery. Not this time.

If the Asian real estate bubble pops, gold will pop. It is an Asian culture to sell gold in time of adversity.

So whether gold pops or booms will depend on the real estate bubble in China and India.

[jtabeb]

Re: Gold in a bubble and/or going to $3,000

Sell when Suzie Orman puts a "BUY" out on gold. Till then, smooth sailing. She called the top in the NASDAQ and the Housing Market with her "BUY" calls. Most reliable market indicator out there. Her current recommendation? UST!?!? Run like the fu^&ing wind! (On UST, not on GOLD).

I like this so much I coined a phrase for it. "The Suzie Orman PUT". as in what ever Suzie says to buy, "PUT" it. You would have lived and thrived through two of the biggest bubbles in financial history with this advice. My bet is that the third time will also be a charm.

From a Larry King Interview

Read how piss-poor her forecast on Dot-Com's and Housing was. (She ACTUALLY SAID the top in housing was 2000, right before he biggest property bubble in history).

http://transcripts.cnn.com/TRANSCRIP...17/lkl.00.html

"KING: Do you ever recommend gold or silver? ORMAN: No, never.
KING: You ever recommend commodities?
ORMAN: Never.
KING: Never?
ORMAN: Never."


There are many miles left to be run in this Gold bull market!


What is my point? There are many like Nero3 that speak but don't think. They will be proven wrong as they have been for the last 10 years straight.

[touchring]

Re: Gold in a bubble and/or going to $3,000

What is my point? There are many like Nero3 that speak but don't think. They will be proven wrong as they have been for the last 10 years straight.

Gold is a bet on the commodity market, and the Asian construction and real estate bubble. Do you live in Asia? Does the editors of iTulip live and work in Asia?

I'm not saying gold is topping, but I think there's a positive short term correlation between the Asian bubble and gold.

And yes, the Chinese real estate bubble is now about 10 years old.

Will the bubble continue expanding? Possible, but will it run for another 5 or 10 years? Certainly no.

When will it burst - soon. Asian countries are releasing tightening measures every 2 or 3 months, it is only a matter of time.

Last, Singapore slapped a max. 50% of purchase price for real estate bought by corporations, and a 16% VAT on real estate sold within 1 year of purchase, 12% if within 2 years, and 8% if sold within the 3rd year, and so forth.

[c1ue]

Re: Gold in a bubble and/or going to $3,000

I'm not serious about that really happening because of clue or metalman, but think about it.

You're not serious about anything.

You have no positions. You have no real world experience. You're not even putting a modicum of mental effort.

You're just trolling.

By all means continue to post for whatever strange motivation you have; for me your posts are 100% a waste of time.

[ThePythonicCow]

Re: Gold in a bubble and/or going to $3,000

I think that the more you post your positions, the more your ego get into your positions, bad for the ability to quickly change your positions or that humble attitude that's so important, like in changing your mind when you are burning cash. I think this is psychological effects.

Well said. I tend to limit what I say about my own (quite modest) positions as well, for much the same reason.

Thank-you, also, for not resorting to negative or ad hominem attacks, despite how tempting that might seem, given the tone of some of the other posts.

[nero3]

Re: Gold in a bubble and/or going to $3,000

If the Asian real estate bubble pops, gold will pop. It is an Asian culture to sell gold in time of adversity.

So whether gold pops or booms will depend on the real estate bubble in China and India.

The thing that I don't think Americans in some aspect's, at least those with limited travel experience reflect on is the perception and the role of the dollar outside of the US. Most the things about the weakness of the dollar is not anything else than a media story. It's not how the person on the street perceives it. They have seen their currencies crash against the dollar before. I have a higher trust in the dollar than in my own currency. The dollar is in my opinion the reserve currency for at least the next 10 years. When the foreigners are overwhelming the trading volume on our local stock exchange, the locals, knows it's a bubble fueled by a weak dollar. I think there is a general confusion in that some thinks the weak dollar will be a permanent state of decline, or that even things such as hyperinflation or other dramatic events will occur. I will step down my posting volume here for now, it's to stressful, with all this criticism, but it was interesting to be back for a while.

I think Greenspan raised rates in 94. A stronger dollar is slow killer for speculative bubbles outside the US. I'll add that it could be some lengths to go before inflation is at 27 % in China as in late 94, other Asian markets went even further, read about the Asian miracle, however, they won't last long if the dollar goes stronger. The Nikkei did well with a strong dollar in the eighties, however most of the other markets did well after the plaza accord (in 85), on a weak dollar.

[jtabeb]

Re: Gold in a bubble and/or going to $3,000

I hope countries come to their senses and impose sound fiscal and monetary policies. Then I could invest for the future instead of buying insurance.

[touchring]

Re: Gold in a bubble and/or going to $3,000

Since the RMB is pegged to the dollar, won't that make the RMB a good bet at this point also?

The dollar may not be the best, but it is definitely much better than overvalued Asian currencies like the AUD and SGD.

The thing that I don't think Americans in some aspect's, at least those with limited travel experience reflect on is the perception and the role of the dollar outside of the US. Most the things about the weakness of the dollar is not anything else than a media story. It's not how the person on the street perceives it. They have seen their currencies crash against the dollar before. I have a higher trust in the dollar than in my own currency. The dollar is in my opinion the reserve currency for at least the next 10 years. When the foreigners are overwhelming the trading volume on our local stock exchange, the locals, knows it's a bubble fueled by a weak dollar. I think there is a general confusion in that some thinks the weak dollar will be a permanent state of decline, or that even things such as hyperinflation or other dramatic events will occur. I will step down my posting volume here for now, it's to stressful, with all this criticism, but it was interesting to be back for a while

[skidder]

Re: Gold in a bubble and/or going to $3,000

I'm interested in what basis for the gold price is being used by all involved in this question of a gold bubble? Are we starting with a multi-decade low of $250 ish price, that at the time didn't even cover the cost of production? Are we starting with the $850 blow off top in the late 70's or are we starting with a decades long gov't controlled price of $42?

I don't really see how anyone, given the long term gov't/central bank influence and short term lack thereof in the 70's, can come to any definitive basis for a starting price point for inflation extrapolation purposes. Of course that is without even considering the other factors surrounding golds unique position in the world as money during these times of monetary turmoil, or what inflation rate to use given the hijinks of the Boskin commission in the early 90's and ongoing revisions the BLS incorporates into their models on a monthly basis.

With regard to EJ's latest piece, my only question/concern is how does someone correctly assess any new monetary system? What parameters does the new system have to meet in order to consider selling ones gold?

I believe EJ made a remark in one of his early pieces that basically reminds us that we could sell at $5,000 only to see it skyrocket to $50,000 should the currency completely fail (this is a paraphrase from memory so excuse me if I misrepresent his comment).

Given that concern and the inevitability of a currency crisis which MAY result in a new currency for U.S. citizens, how do we go about assessing whether this new currency (assuming we get one) is going to "hold" or not over the near/intermediate term (20yrs +)?

[nero3]

Re: Gold in a bubble and/or going to $3,000

Since the RMB is pegged to the dollar, won't that make the RMB a good bet at this point also?

The dollar may not be the best, but it is definitely much better than overvalued Asian currencies like the AUD and SGD.

I'm going to reduce my volume here. Anyhow, as I have mentioned. I think the RMB is overvalued because it's so much of it around, and will need to be devalued if their real estate bubble was to collapse simply because they need to provide the liquidity to the banking system (as they did in 93 or 94).

[nero3]

Re: Gold in a bubble and/or going to $3,000

Given that concern and the inevitability of a currency crisis which MAY result in a new currency for U.S. citizens, how do we go about assessing whether this new currency (assuming we get one) is going to "hold" or not over the near/intermediate term (20yrs +)?

I don't really know what you are asking, or who, but if u are lucky enough to have gold if it were to turn into a big bubble, even go to 1:1 or even 2:1 with the dow, the logical thing is to dump it and buy stocks, no matter how bad the outlook for hyperinflation, those who swapped into stocks in 1980 did quite well.

[we_are_toast]

Re: Gold in a bubble and/or going to $3,000

I hope countries come to their senses and impose sound fiscal and monetary policies. Then I could invest for the future instead of buying insurance.

I always try to define an exit strategy for any position I take, before I enter the position. When I took my major gold position in 2004 (long before I knew of iTulip), I set some conditions for getting out.

1) When the U.S. and other major governments of the world show a clear path for eliminating or substantially reducing their debt, without major inflation or dollar destruction.
2) When the U.S. shows signs of restricting PM trades.
3) When the people I begged to buy gold back in 2004 come back to me and say they are now buying gold.

Jewelry purchases in India, or gold hoarding by the Chinese, are minor bumps in what will continue to be a wild ride. I won't be stubbornly rigid with my conditions, but so far, I see no reason to do anything but add to my positions on these dips, which I am doing.

[nero3]

Re: Gold in a bubble and/or going to $3,000

One example I take, in 2000 when the dollar was strong buying JNJ would have costed 490 in local currency, with the quarterly yield at 0,14 , now it's yielding 0,54 in dividends and costing 360. I don't know how their payout ratio have changed, but I think it's been pretty stable.

The total discount since 2000 (this stock peaked in 2002), is around 80 % in local currency. That's the general story. In the meantime, gold is up around 4 times in local currency since the bull-market began. I hear gold is supposed to go higher. However, I think it's not a good buy. It have no appeal to the value-investor. In 2001 gold was down around 50 % from the peak in 1980 in local currency. Maybe it was a good buy then. Now, in 2011 it's a speculators market.