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The gold bubble: when will they bust it?

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There are five threads on gold going on the ASF at the moment.

This for an asset that does not produce any income (trading it excepted) and relies on some other mug to pay more for it than you bought it at to lock in capital growth.

Then again the market is never wrong

Good luck if you are buying (& holding) the 'barbarous relic' on the way up militia men.

My 2c (readies himself to be beaten around the head by an 'end is nigh' placard).
 
Can't argue with the returns.Doubled my money plus some (so long as gold doesn’t tank next few days), while the share market went the other way. Hmm my next investment might be in canned goods and ammo the way these gold threads are going

For me it was a great investment. Easy to spot the run as well.
 
moXJO said:
Can't argue with the returns.
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Ain't that the truth .... it was a cracking investment at the top of the bull (even if it is a con-job, a statement which I know is a moot point as you just need some other dude to stump up some more 'worthless' cash for your gold than you paid for it to make a buck ).

I'm all for corporate bonds to be the 'star' for the next six-months as the solvency issue is clarified.
 

"solvency issue is clarified" can you clarify that? You mean wait to see which one's don't go bust? So what do you invest in in the meantime, if not gold?

If you live in another country, like the US, Britain, Iceland, Ireland etc etc and lob up to your bank to withdraw your money, as cash, and they won't let you withdraw it because it's not there any more, you'll understand the dynamics of gold. Are you really that confident that the same won't happen here, or that corporate bonds will be worth zip if the company goes broke? Sounds like you missed the golden boat?
 
Bushman said:
I'm all for corporate bonds to be the 'star' for the next six-months as the solvency issue is clarified.
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USD corporate bond instruments like LQD (NSYE) have performed just as good or in some cases better than gold investments if you went long in Oct/Nov lows. Unless you were purely into gold no miners, but the difference is negligible. Also provided the same USD backing that made gold so great in Oz.

They did not however, provide this great performance during the bull and have been in a longterm downtrend (and the recent bounce has only been to resume this trend). (Although I recognise this may have been due to rising yields)

There has been some dragging down this month but I continue to keep watch.
 

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What's interesting is NCM now pays a better dividend than JP Morgan stock in the States.

Bubble... well when it hits the headlines at $2000 per oz, similar to the inflationary adjusted terms of 1980 I might decide to join the sceptics in the bubble crowd. Sir Allen Standford -> South & Central America bank runs and now Eastern Europe looking shaky coupled with continual write downs in the banking sectors of Europe and the US. Not to mention the unravelling of the Madeoff scam.

Just watch the movie The International with Clive Owen. Fact is all Ponzi dudes are not in prison yet!

I don't believe in the fairy tales or in the lack of self-conciousness of the herd fed by the media outlets.

Gold is the place to be in 2009.

But as always DYOR, by the way I don't categorise listening to the media as Research.

 

Sure I did miss the golden boat in terms of physical gold but it is the current bearish frenzy rather than sour grapes that is sparking my interest. If I had bought into physical gold (rather than listed miners) 18 months ago I would be holding at these levels and riding the crest of the wave.

Hey I am South African by birth and my father-in-law is a gold miner - I am aware of its unique ability to store and create wealth. But at these levels it is a bit 'toppish' for me. Now in the 1980's, the Au price still doubled from these levels but i cannot pick turning points. And we saw what happened to the oil price and the speed with which it unwound!

Having said all that it is undoubtedly an alternative for cash (with vastly superior performance over time when compared to the various Fiat-based debacles including the USD) and thus it's value is based on psychology and the absolute trust it is afforded by investors. This is a characteristic that investors will pay a significant amount of paper-based money for in a recession.

In terms if bonds, there are many MF that allow you to diversify (at the cost of a mgt fee) to get rid off the land mines. A good manager (PIMCO etc) is the key. Also steer clear of rust-belt industries that need molto capital to remain competitive when the GFC has curbed their ability to do so and what is left of the purveyors of credit and you won't go wrong. My 2c and musings on a slow day in the office.

In Oz, the bond market is a bit thin so global would be the way to go.

My 2c but as an asset class bonds have some good potential in the short-to-medium term.
 
Bushman said:
Sure I did miss the golden boat in terms of physical gold .
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rubbish, the boat is still loading. have a good read up on the financial paper money farce and you will soon realise that physical gold is the only insurance against having nill. paper is trash and will be nill.

no capitals cause i am in a phone queue to get my grandson a pass for citylink. his first day at uni tomorrow. he has some silver in the vault too.
 
Bushman said:
Sure I did miss the golden boat in terms of physical gold
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heh, maybe, just maybe, when your mum, local taxi drivers and shoe cleaners start giving you advice to buy gold, then it should be about the time to jump boat.

Gold has started to become more and more "mainstream", but no where near the manic level that usually describe a bubble. Of course, like I said again, it's impossible to identify after it has burst. So ride on until fiat money has restore its confidence again.
 
MR. said:
Bernanke optimistic on recession end


.
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Lol; to be fair he also said that subprime was contained! But with all the money being pumped we should have a 'recovery' in 2010. Otherwise what is the faarkkken point of all this fiscal pump priming?

Now will we have inflation in 2010/2011 to go with our economic 'recovery'? Then I'll buy me into that yellow ponzi too!
 

Should add...... No need to have this CASH now either. Inflation might now get a grip! All well that ends well..... it's all over...... Happy days now...... That's what we want to hear and see..... It's about time .....
 
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