Is Gold in a Bubble?

[Charles Mackay]

Re: Is Gold in a Bubble?

(originally posted in Ask EJ)

Came across this on the Kitco Gold Forum, where it was mostly ridiculed by the gold bugs there. Any comments?

http://i430.photobucket.com/albums/q...old-bubble.png

There is no such thing as a bubble in real money... only a bear market in things real money buys.

[metalman]

Re: Is Gold in a Bubble?

Nope, nothing changed and it doesn't contradict anything. It took me quite a few pages to demonstrate how the financial alchemy of ETN-like (aka synthetic derivatives based on futures) paper, that wwas used to play with the oil price. And if you read that thread carefully you will see I said the same thing there, quite a few times.

Why do you think at the end I had no argument when Fred told me that it wasn't a bubble because it doesn't fit the iTulip definition of a typical bubble? Because in a way he is right. The truth is we didn't have a typical case of asset price bubble in the case of oil.

Of course, if judging after the same rigorous standards one may say there was no housing bubble, but a mortgage derivatives bubble .. let's not go there, because we will be derailing another thread.

so you didn't post a link to a 60 min segment on oil and say that marked the end of the oil bubble, the title of the thread you started.

[Prazak]

Re: Is Gold in a Bubble?

Right on Zoog.

Deceptively simple but substantive reply on your part, to a deceptively plausible but fundamentally flimsy question on the part of this article.

Kitco's editorials fall under the sway of Jon Nadler, whose track record of posting consistently bearish prognoses for the metals is so uninterrupted over the years, that it begs us to notice that Kitco's entire posture as a business is essentially to be short the PM's, because they act as a depository for metals, and regularly receive cash from clients for metals for which they purport to hold freshly acquired metal on a dollar for dollar basis.

Now let's consider why a metal vault would post articles over the years by their "lead analyst" which were so consistently bearish the metals? Here they are and their very business is the sale and storage of gold, and their "lead analyst" spends much of his time talking it down? Peculiar. One would imagine instead that like Paul Tustain at BullionVault and James Turk at GoldMoney, they'd post articles which remained for the most part fundamentally bullish the metals? At Kitco, "for the most part" Nadler's articles are bearish with a notable consistency.

If they did not own the full extent of their cash receipts in backing bullion, then their best interests would be served by the metals going DOWN as opposed to UP. A metals warehouse with less gold and silver than the cash received, is by very definition inclined to be short metals, as that reduces the extent of their exposure for any cash receipts not currently backed by gold.

It is not a small datum, that gold bullion dealers have one of the highest fail rates of any industry as their shorting of metals to hedge their ongoing business is notoriously fickle and risky. Meanwhile, Jon Nadler is the mouthpiece for this organization and a lot of people consider his articles "curiously consistent" for being perennially biased on the short side. IMO he's a shill.

Here here. I read Nadler's "commentaries" daily. Not only is he consistently bearish on gold, but he seems to delight in mocking the bulls, and particularly those goldbugs, like the folks at GATA, who claim that the market is being manipulated toward official ends. I often come away thinking "me thinks Nadler doest protest too much".

[Guest]

Re: Is Gold in a Bubble?

I occasionally daydream of throwing some rotten eggs at that guy's immaculately pressed wanker-banker suit. ... I know that's very "bad form" on my part, but this is the deep unconscious speaking to me.

Here here. I read Nadler's "commentaries" daily. Not only is he consistently bearish on gold, but he seems to delight in mocking the bulls, and particularly those goldbugs, like the folks at GATA, who claim that the market is being manipulated toward official ends. I often come away thinking "me thinks Nadler doest protest too much".

[Prazak]

Re: Is Gold in a Bubble?

I occasionally daydream of throwing some rotten eggs at that guy's immaculately pressed wanker-banker suit. ... I know that's very "bad form" on my part, but this is the deep unconscious speaking to me.

Great visual, that. Wouldn't be surprised to see a clip of something along those lines playing at some Tate Modern or MoMA retrospective on this era. In fact, I might just have to go set up a firing squad of uniformed men bearing raw eggs facing a hapless, blind-folded banker; film it; throw it up on You Tube; and call myself an artist.

And I might well steal the phrase "wanker-banker suit" for the title.