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“Gold will sell hard to raise cash which will be king, even under a mattress (literally).”
Not sure I follow that sentence but what do you think happens when everyone sells their gold to raise cash at the same time because they ALL had the same idea about how to hedge for inflation?
Answer: Look at the Asian crisis in 1998. The price of gold plummeted when all of the Asians tried to unload their gold, which they all not so cleverly had tucked away for exactly that kind of event.
“Exhibit 2 – middle class retirees (the very bottom of the investing food chain) talking about what a good investment gold is.”
We had this discussion months/years ago, lechacal. You were right. But I only agree because I now believe we are deflating and will do so for some time. Gold will sell hard to raise cash which will be king, even under a mattress (literally).
It might come back if we hyperinflate next decade or so after this GreatER Depression (civil unrest, geopolitical chaos, etc). Go short, then long?
Gold isn’t money. It’s gold. People use it for stuff like jewlery and electronics. But people also speculate in it by guessing what other people might be willing to pay for it. Fundamental value based just on supply and non-speculative demand is a small fraction of current market value.
Peoiple could just as easily speculate on any other commodity with a limited supply and some kind of history of monetization. I’ve got a good one – wampum. The wampum supply is limited, wampum is used in jewlery, and wampum used to be used as money!! Shit you used to be able to pay your taxes with it in Massachusetts!! If you can convnice enough people of that you can create a speculative bubble where the price is based on nothing more than what other speculators will pay.
Tulip bulbs – same thing happened.
Tech stocks – not exactly the same thing, but similar. Value completely separated from fundamentals and became nothing more than a guess as to what other speculators would pay (which in turn would be based on what the next speculator was expected to pay).
Housing in Florida.
Seeing a trend?
I don’t know when it will happen, but gold prices are going to take it in the pooper pretty hard. They might go up more in the meantime. That depends on whether the current wave of speculative buying has exhausted itself. I can’t call the top. I can only identify a bubble when I see one.
Besides, when are people going to sell all of this gold they are buying? What’s the end game? Sell when the shit hits the fan, right? So everyone goes from (1) all buying at the same time to (2) all selling at the same time?? Would you rather be selling now (when everyone is buying) or selling when everyone else is trying to sell???
I have never shorted anything. But I might short gold if it goes up much more.
Exhibit 1 – gold vending machines.
Exhibit 2 – middle class retirees (the very bottom of the investing food chain) talking about what a good investment gold is.
Exhibit 3 – I’m usually right about stuff like this (said the same thing about the Nasdaq in 1999/2000, said the same thing about the housing market in 2005-2007).
Gold has been in a ten year bull market. It is not at all surprising that the trend is getting tired. Hopefully there will be plenty of warning before it is time to go short.
“Gold will sell hard to raise cash which will be king, even under a mattress (literally).”
Not sure I follow that sentence but what do you think happens when everyone sells their gold to raise cash at the same time because they ALL had the same idea about how to hedge for inflation?
Answer: Look at the Asian crisis in 1998. The price of gold plummeted when all of the Asians tried to unload their gold, which they all not so cleverly had tucked away for exactly that kind of event.
You forgot Housing in Brownstone Brooklyn TM, lechacal!
***Bid half off peak comps***
“Exhibit 2 – middle class retirees (the very bottom of the investing food chain) talking about what a good investment gold is.”
We had this discussion months/years ago, lechacal. You were right. But I only agree because I now believe we are deflating and will do so for some time. Gold will sell hard to raise cash which will be king, even under a mattress (literally).
It might come back if we hyperinflate next decade or so after this GreatER Depression (civil unrest, geopolitical chaos, etc). Go short, then long?
***Bid half off peak comps***
Gold isn’t money. It’s gold. People use it for stuff like jewlery and electronics. But people also speculate in it by guessing what other people might be willing to pay for it. Fundamental value based just on supply and non-speculative demand is a small fraction of current market value.
Peoiple could just as easily speculate on any other commodity with a limited supply and some kind of history of monetization. I’ve got a good one – wampum. The wampum supply is limited, wampum is used in jewlery, and wampum used to be used as money!! Shit you used to be able to pay your taxes with it in Massachusetts!! If you can convnice enough people of that you can create a speculative bubble where the price is based on nothing more than what other speculators will pay.
Tulip bulbs – same thing happened.
Tech stocks – not exactly the same thing, but similar. Value completely separated from fundamentals and became nothing more than a guess as to what other speculators would pay (which in turn would be based on what the next speculator was expected to pay).
Housing in Florida.
Seeing a trend?
I don’t know when it will happen, but gold prices are going to take it in the pooper pretty hard. They might go up more in the meantime. That depends on whether the current wave of speculative buying has exhausted itself. I can’t call the top. I can only identify a bubble when I see one.
Besides, when are people going to sell all of this gold they are buying? What’s the end game? Sell when the shit hits the fan, right? So everyone goes from (1) all buying at the same time to (2) all selling at the same time?? Would you rather be selling now (when everyone is buying) or selling when everyone else is trying to sell???
I have never shorted anything. But I might short gold if it goes up much more.
Exhibit 1 – gold vending machines.
Exhibit 2 – middle class retirees (the very bottom of the investing food chain) talking about what a good investment gold is.
Exhibit 3 – I’m usually right about stuff like this (said the same thing about the Nasdaq in 1999/2000, said the same thing about the housing market in 2005-2007).
Get your shoes shined often and stay tuned, DCB.
***Bid half off peak comps***
Dinner at Kaz An Nous last night – truly excellent!
Gold has been in a ten year bull market. It is not at all surprising that the trend is getting tired. Hopefully there will be plenty of warning before it is time to go short.
So apparently Canadians are scoring a lot.
“Why are government employees at all levels so incredibly imbecilic??”
Is this a trick question?