Tuesday, November 9, 2010

Is Gold in a bubble?

According to Charles Wallace who believes what he was told:
1. Gold.The price of gold bullion has risen from $294 an ounce in 1998 to $1,404 today, an increase of 377%. "It's the biggest, baddest bubble of them all," says Robert Wiedemer, author ofAftershock: Protect Yourself and Profit in the Next Global Financial Meltdown.Gold has no intrinsic value. A telltale indicator that gold is a bubble: incessant cocktail party chatter about buying gold and endless TV commercials offering to buy gold jewelry.

He also believes that the dollar is in a bubble.  Which is what I said.   When the Fed has to start fighting inflation, bond yields will rise.  If they don't tighten monetary policy, then the dollar goes to zero.  On the other hand, while they continue pumping funny money into the economy, this happens.  Inflation is what happens when governments can't pay their bills.  It has a long history behind it.  The dollar and gold can't be in a bubble at the same time.  Which is what he said.  Read the entire article.

This is disinformation to get people to believe in deflation.  That gives the Fed cover to keep printing funny money.

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