Showing posts with label Gold Bubble. Show all posts
Showing posts with label Gold Bubble. Show all posts
Friday, October 19, 2012
How Far Can Gold Prices Rise? $5,000? More?
We are living in extraordinary times in relationship to the price of gold and its correlation to the quantitative easing programs put into play by major economic global players around the world.
So while the idea of gold soaring to price of $5,000, and possibly even to $10,000, while seemingly outrageous for the uninitiated, could in fact become a reality, dependent upon how economies respond to previously failed stimulus measures, and how those nations deal with the growing amount of debt incurred as a result of creating money out of thin air.
A couple of major factors are the debasement of currencies and how high inflation will rise.
Gold prices will largely move on those two factors, especially when the U.S. dollar and other currencies fall in value and are no longer perceived to be places to safely park one's capital.
The major problem with predicting the price of any asset is usually those who understand where things really are, tend to get overly excitable and project prices reaching certain levels dates which are too short in duration. Afterwards, most investors don't believe the probable numbers because of the many failed short-term predictions. But that doesn't mean the underlying assumptions are false, just that the people making the predictions usually are doing so to garner attention to themselves.
That aside, gold will continue to be in a bull market for some time to come, and bubble status hasn't come close to reaching proportions which could actually be identified as such in any meaningful way. The price of gold,, in other words, isn't close to reaching the top yet, and nowhere near enough casual investors have entered into the gold fray yet to allow speculative investing to push the gold prices up. As a matter of fact, we're not even close to that to use the term "bubble" in relationship to gold prices. It will happen someday of course, but is likely to be years away, as well as a much higher price away.
Even those with a much more conservative bent see gold climbing to $2,000 over the next 12 months or so, and possibly as soon as a few months from now, which could be around the early part of 2013.
With the direct connection between the price of gold and creation of money out of thin air, the current practices of open-ended stimulus by the Federal Reserve - the central bank of America - and the lack of effect on helping the economy, all that's really happening is a growing debt load and rising inflation, with nothing positive in return. That is a extraordinarily positive environment for gold, and as well for silver, and both will benefit over the next decade or so, and possibly much longer, depending on the actions of governments and central banks during that time.
The only reason the U.S. dollar hasn't appeared to totally collapse, is other major economic players and their central banks have taken the same actions, which masks the fall in value of the U.S. dollar, because their currencies are also falling. It's more accurate to measure any currency and its value against gold than other currencies, as they're generally simply moving in lock-step with one another because of similar actions taken by central banks, which negates the fall in value of the U.S. dollar.
All of this is to say there is no political desire or will to stop the creation of funny money, and until and if that happens, or is forced to happen, there is absolutely nothing to keep the price of gold to continue on to new heights.
In the end, we're in totally uncharted territory as far as the amount of money being printed, national debt, and amazingly high unfunded liabilities. In the United States alone unfunded liabilities are over $220 trillion (that's not a typo).
But even with these unprecedented numbers, the underlying elements that push the price of gold up are still in place, and because they're increasing in number, as far as money creation goes, and it's only a matter of time before inflation of major proportions set in, gold prices will continue on their upward trajectory, and while it's impossible to know how high it'll go and how long it will take, we're going to continue to see an amazing story unfold concerning gold, and those riding the trend will continue to see their wealth grow with it.
At this time there is no reason to fear a gold bubble, as it's unlikely we're even in the early stages of one. But there will be a time when it arrives, yet even then history has proven the price of gold can soar for some time before it settles back down to earth. We're not close to being there yet, although there will continue to be corrections, which for now must be considered buying opportunities.
So will gold reach $5,000 or even $10,000. It's totally possible, although there is no way to put a time frame on it. All of this will be determined by central bank actions and government policies. Look to Europe to note that governments have little will to implement austerity policies, even though they must if they are to survive. Each government continues to attempt to kick the can down the road and hope it doesn't stop on their watch. One day it will, and gold and those investing in it will wildly benefit from it; even more so than they have in the past in all likelihood.
We are in uncharted territory will central bank money printing and government debt and obligations around the world, that means the price of gold is also in uncharted territory, and all we can do is follow the actions and trust what we know to be the consequences of the practices of these two entities. Nothing will change gold price movements as they relate to the actions of governments and central banks, and how it has responded in the past will continue to be the same in the future until there is in fact a real gold bubble. We're not there yet.
Monday, May 17, 2010
Exxon Mobil (NYSE:XOM), Petroleo Brasileiro SA (NYSE:PBR) Stakes Raised by Soros Fund Management
George Soros juggled up his Soros Fund Management holdings, adding strongly in the energy and oil sector, including Exxon Mobil (NYSE:XOM), Petroleo Brasileiro SA (NYSE:PBR) and Suncor Energy (NYSE:SU), while cutting back on exposure to the financials like Citigroup (NYSE:C) and The Bank of New York Mellon Corporation (NYSE:BK).
The Bank of New York Mellon Corporation and Altria Group (NYSE: MO) he liquidated positions in altogether.
Somewhat surprising and probably regretfully in hindsight, he cut back his position in SPDR Gold Trust (NYSE:GLD).
Soros mentioned earlier in the year that gold was a bubble ready to burst, but he misread the situation, and he continues to misread it, as gold continues on its upward climb.
This isn't to say there won't be corrections in the gold market, but the bubble situation isn't close to appearing yet, as it will take clueless people entering the gold market who don't understand the underlying fundamentals to create a gold bubble.
With all the money floating out there, printed by central banks around the world, there is little to keep gold from continuing to go up in price, as well as well as to protect their assets in the ongoing economic hardships we're going to face, as Europe continues to crumble and China is almost sure to cut back on exports because of its battle against inflation through increasing interest rates and clamping down on excesses in its property market.
The stake in Exxon Mobil by Soros Fund Management was increased by 80 percent, while the stake in Petroleo Brasileiro SA (NYSE:PBR) had 18 percent added to it.
Their position in SPDR Gold Trust was cut by 9.6 percent.
The Bank of New York Mellon Corporation and Altria Group (NYSE: MO) he liquidated positions in altogether.
Somewhat surprising and probably regretfully in hindsight, he cut back his position in SPDR Gold Trust (NYSE:GLD).
Soros mentioned earlier in the year that gold was a bubble ready to burst, but he misread the situation, and he continues to misread it, as gold continues on its upward climb.
This isn't to say there won't be corrections in the gold market, but the bubble situation isn't close to appearing yet, as it will take clueless people entering the gold market who don't understand the underlying fundamentals to create a gold bubble.
With all the money floating out there, printed by central banks around the world, there is little to keep gold from continuing to go up in price, as well as well as to protect their assets in the ongoing economic hardships we're going to face, as Europe continues to crumble and China is almost sure to cut back on exports because of its battle against inflation through increasing interest rates and clamping down on excesses in its property market.
The stake in Exxon Mobil by Soros Fund Management was increased by 80 percent, while the stake in Petroleo Brasileiro SA (NYSE:PBR) had 18 percent added to it.
Their position in SPDR Gold Trust was cut by 9.6 percent.
Tuesday, April 20, 2010
George Soros' Gold Bubble Stupidity
Earlier in the year George Soros made the ridiculous comment that gold was in a bubble, but not only that, it was "the ultimate bubble," said Soros.
Of course he's been proven to be completely wrong, as the fading former investing star obviously was playing investors in an attempt to influence gold on his behalf, as he had invested millions in gold companies not too long before he made the statement.
It's quite possible he had shorted the position and was hoping investors would flee gold and prices would plunge. He could make a ton of money that way, or he may have been trying to get people to sell their positions in gold mining companies and then buy up a bunch of shares at depressed prices.
Either way, it didn't work, and gold continues to have support, and there's little in the near future that will change that, and in the long term it seems that will be the case as well.
Of course when interest rates are ultimately raised, we'll see at that time how far gold has decoupled from the U.S. dollar and if it's standing on its own in a way it hasn't for a long time.
There are so many variables at this time, it's impossible to see very clearly, even in the short term, and with the U.S. government, and other governments around the world, interfering and influencing markets in major ways, it's hard to tell what they may do to upset things, as it's usually something stupid with the normal unintended consequences.
Even if there is a major gold correction, I don't think we'll be seeing it fall far below $1,000 an ounce any time soon, and even if it does, the economic climate we live in and the inevitable economic challenges we're going to continue to face in the near future, gold will remain one of the few safe places people will run to, and that isn't even bringing inflation into the picture, which is happening in a number of sectors already, such as iron ore and copper prices.
Of course he's been proven to be completely wrong, as the fading former investing star obviously was playing investors in an attempt to influence gold on his behalf, as he had invested millions in gold companies not too long before he made the statement.
It's quite possible he had shorted the position and was hoping investors would flee gold and prices would plunge. He could make a ton of money that way, or he may have been trying to get people to sell their positions in gold mining companies and then buy up a bunch of shares at depressed prices.
Either way, it didn't work, and gold continues to have support, and there's little in the near future that will change that, and in the long term it seems that will be the case as well.
Of course when interest rates are ultimately raised, we'll see at that time how far gold has decoupled from the U.S. dollar and if it's standing on its own in a way it hasn't for a long time.
There are so many variables at this time, it's impossible to see very clearly, even in the short term, and with the U.S. government, and other governments around the world, interfering and influencing markets in major ways, it's hard to tell what they may do to upset things, as it's usually something stupid with the normal unintended consequences.
Even if there is a major gold correction, I don't think we'll be seeing it fall far below $1,000 an ounce any time soon, and even if it does, the economic climate we live in and the inevitable economic challenges we're going to continue to face in the near future, gold will remain one of the few safe places people will run to, and that isn't even bringing inflation into the picture, which is happening in a number of sectors already, such as iron ore and copper prices.
Wednesday, March 17, 2010
Gold Responding to Interest Rates
One thing this super recession has taught people, and if nothing else, it could be a great silver lining to some of the pain people have gone through, and that is, interest rates exist for a certain purpose, and they aren't always safe, and there are other factors to consider when deciding whether to invest in something with interest rates, or consider another option.
Just look at municipal bonds as an example. Who would have used the term risk and municipal bonds in the same sentence three years ago? Now though, there are a growing number of financial advisers urging their clients to get out of them, as they are highly toxic at this time, and could be for years, depending on a lot of factors; like the financial health of the city issuing them and the project the money is being raised for.
So many people think when the Federal Reserve finally raises interest rates, people will flock out of gold and other commodities and get the higher returns offered through those types of investments. Most believe that won't happen until the latter part of 2010 at the earliest. The Federal Reserve held things right where they're at today concerning interest rates, and gold responded in a nice upward movement.
Anyway, what are the potential consequences of interest rates going up for holders of gold? The real question will be how much more does the average investor on the street understand the fundamentals of gold as it relates to monetary policy and its effects on the economy. If they at least have a general understanding of that, there won't be much of a move out of gold, although the majority of holders continue to be seasoned or institutional investors. If the average person starts investing in gold, that will be a major factor in the overall impact on gold.
Another key element is the same question, but being directed toward institutional investors. Are they any more in the know than the average, individual investor? In many, if not most cases, they aren't. They are Keynesian's, even if they don't understand what that means, and they will operate based on certain assumptions that probably are no longer viable in the post-recession world, once there is a post-recession that is.
Inflation is going to be held off much longer. Money will eventually be released into the markets, and the pent-up demand is extraordinary, and we could see amazing surges in commodity prices as a result. Look at iron ore this year based on demand, and as far as globally, we're far from what could be called a recovery in any meaningful way.
Another big part of the puzzle is the bond market. Once that collapses, which it almost assuredly will, even more investors will pour money into commodities, especially gold. At that time all bets are off as to how high gold prices will go.
Once that happens, we will then finally enter into a possible gold bubble, but that's not here, and won't be until these other events line up.
Gold won't be going away any time soon as a solid investment and place of safety. I think we're really just getting started, and while exact timing and events could take some interesting turns and twists, we will ultimately arrive, and those positioned in gold will benefit greatly while protecting their wealth and spending power.
Just look at municipal bonds as an example. Who would have used the term risk and municipal bonds in the same sentence three years ago? Now though, there are a growing number of financial advisers urging their clients to get out of them, as they are highly toxic at this time, and could be for years, depending on a lot of factors; like the financial health of the city issuing them and the project the money is being raised for.
So many people think when the Federal Reserve finally raises interest rates, people will flock out of gold and other commodities and get the higher returns offered through those types of investments. Most believe that won't happen until the latter part of 2010 at the earliest. The Federal Reserve held things right where they're at today concerning interest rates, and gold responded in a nice upward movement.
Anyway, what are the potential consequences of interest rates going up for holders of gold? The real question will be how much more does the average investor on the street understand the fundamentals of gold as it relates to monetary policy and its effects on the economy. If they at least have a general understanding of that, there won't be much of a move out of gold, although the majority of holders continue to be seasoned or institutional investors. If the average person starts investing in gold, that will be a major factor in the overall impact on gold.
Another key element is the same question, but being directed toward institutional investors. Are they any more in the know than the average, individual investor? In many, if not most cases, they aren't. They are Keynesian's, even if they don't understand what that means, and they will operate based on certain assumptions that probably are no longer viable in the post-recession world, once there is a post-recession that is.
Inflation is going to be held off much longer. Money will eventually be released into the markets, and the pent-up demand is extraordinary, and we could see amazing surges in commodity prices as a result. Look at iron ore this year based on demand, and as far as globally, we're far from what could be called a recovery in any meaningful way.
Another big part of the puzzle is the bond market. Once that collapses, which it almost assuredly will, even more investors will pour money into commodities, especially gold. At that time all bets are off as to how high gold prices will go.
Once that happens, we will then finally enter into a possible gold bubble, but that's not here, and won't be until these other events line up.
Gold won't be going away any time soon as a solid investment and place of safety. I think we're really just getting started, and while exact timing and events could take some interesting turns and twists, we will ultimately arrive, and those positioned in gold will benefit greatly while protecting their wealth and spending power.
Monday, March 15, 2010
Gold Prices Surge on Sovereign Debt Worries
Gold and Sovereign Debt
A warning from Moody's today on the sovereign debt risk rating to four major economies, which include the U.S., Britain, Germany and France, caused gold prices to rise as safety was on the minds of investors today.
But before investors leave the gold sector, they need to look closely at the potential consequences of the risk associated with losing their AAA-rating status and why it's a reality.
Look at the plunge in value of the euro in relationship to little Greece to see what could happen if any of these nations were in the same position, which in reality they aren't that far off.
Moody's also said Spain is probably the closest among countries at this time to be at risk of losing their status, and some observers have said if Spain fell the European Union couldn't support them, and the euro experiment, and the Union itself could be over.
As far as the performance of gold prices, this is why even though the U.S. dollar had some strength today gold prices went up with it, as the usual parameters and moving in opposite directions doesn't apply when you start getting into sovereign debt issues.
This is why the idea we're in a gold bubble is ludicrous. The underlying fundamentals for gold, which are as an inflation protection and safety hedge are strong in force, and they are not going to go away any time soon. Consequently, gold prices will continue to rise.
Gold and Sovereign Debt
A warning from Moody's today on the sovereign debt risk rating to four major economies, which include the U.S., Britain, Germany and France, caused gold prices to rise as safety was on the minds of investors today.
But before investors leave the gold sector, they need to look closely at the potential consequences of the risk associated with losing their AAA-rating status and why it's a reality.
Look at the plunge in value of the euro in relationship to little Greece to see what could happen if any of these nations were in the same position, which in reality they aren't that far off.
Moody's also said Spain is probably the closest among countries at this time to be at risk of losing their status, and some observers have said if Spain fell the European Union couldn't support them, and the euro experiment, and the Union itself could be over.
As far as the performance of gold prices, this is why even though the U.S. dollar had some strength today gold prices went up with it, as the usual parameters and moving in opposite directions doesn't apply when you start getting into sovereign debt issues.
This is why the idea we're in a gold bubble is ludicrous. The underlying fundamentals for gold, which are as an inflation protection and safety hedge are strong in force, and they are not going to go away any time soon. Consequently, gold prices will continue to rise.
Gold and Sovereign Debt
Tuesday, March 2, 2010
George Soros: Euro May Collapse
George Soros Euro Collapse
Although George Soros speaks out of both sides of his mouth, as evidenced by his remarks that gold is in a bubble while he had recently invested millions into the metal, he still is interesting to listen to, as you know whether he's speaking the truth or not, that he is interested in what he's talking about, and that's the case with his recent comments that the euro may not survive and be in danger of a total collapse.
One thing you can be sure of from the comments of Soros is he has a stake in the euro, or he wouldn't be talking about it.
Soros says the euro may not survive just from the sovereign risk threat from Greece, although many think the PIIGS overall are much more of a risk than if Greece itself only collapsed. The pigs are Portugal, Ireland, Italy, Greece and Spain.
Many think the euro could survive a collapse of Greece, but a collapse of some of the other countries at the same time, or near the same time, would probably be the end of the European union and the euro.
Soros obviously is attempting to influence the markets to his investment advantage; not the first time he's tried and succeeded at doing it.
George Soros Euro Collapse
Although George Soros speaks out of both sides of his mouth, as evidenced by his remarks that gold is in a bubble while he had recently invested millions into the metal, he still is interesting to listen to, as you know whether he's speaking the truth or not, that he is interested in what he's talking about, and that's the case with his recent comments that the euro may not survive and be in danger of a total collapse.
One thing you can be sure of from the comments of Soros is he has a stake in the euro, or he wouldn't be talking about it.
Soros says the euro may not survive just from the sovereign risk threat from Greece, although many think the PIIGS overall are much more of a risk than if Greece itself only collapsed. The pigs are Portugal, Ireland, Italy, Greece and Spain.
Many think the euro could survive a collapse of Greece, but a collapse of some of the other countries at the same time, or near the same time, would probably be the end of the European union and the euro.
Soros obviously is attempting to influence the markets to his investment advantage; not the first time he's tried and succeeded at doing it.
George Soros Euro Collapse
Thursday, February 25, 2010
China Tightening and Gold Market
China Gold Market
Even though China is tightening their money supply some, according to the Far East managing director of the World Gold Council, Albert Cheng, it will have little effect on the gold market or gold demand..
The reasoning behind Cheng's assertion is the Chinese market doesn't have investment vehicles like exchange-traded funds, so they aren't a factor in that market.
Consequently, the Chinese market for gold is driven by retail investors and consumers, and the majority of them want to include gold as a part of their investment portfolio in order to maintain their wealth.
For China itself, they've been steadily increasing the amount of gold holding they have in the country, up to 1,054 tons now from the approximate 600 tons they had in 2003.
While they are getting a little more investment savvy and didn't bite at the offer from the IMF to acquire about 191.3 tons of gold, it is suspected they continue to buy behind the scenes.
China Gold Market
Even though China is tightening their money supply some, according to the Far East managing director of the World Gold Council, Albert Cheng, it will have little effect on the gold market or gold demand..
The reasoning behind Cheng's assertion is the Chinese market doesn't have investment vehicles like exchange-traded funds, so they aren't a factor in that market.
Consequently, the Chinese market for gold is driven by retail investors and consumers, and the majority of them want to include gold as a part of their investment portfolio in order to maintain their wealth.
For China itself, they've been steadily increasing the amount of gold holding they have in the country, up to 1,054 tons now from the approximate 600 tons they had in 2003.
While they are getting a little more investment savvy and didn't bite at the offer from the IMF to acquire about 191.3 tons of gold, it is suspected they continue to buy behind the scenes.
China Gold Market
Monday, February 22, 2010
George Soros' Gold Contradictions
George Soros and Gold
Why is it that George Soros has said recently gold was "the ultimate asset bubble," and then not long before pour a ton of his money into it?
It think it's a little game Soros is playing in an attempt to throw investors off his trail, throwing out some confusion to keep them from putting some skin in the game.
There isn't a gold bubble right now, and historically a bubble of any sort is when the everyday person is throwing their money at something for the sole reason that everyone else is doing it. Until we see the average person on the street investing in gold, it won't be in a bubble.
This of course doesn't mean there won't be any corrections, just that a bubble is something that is going to burst, and until conditions change drastically, gold will be as solid as a performer as any other investment sector.
It's obvious George Soros is playing a little game by saying one thing while doing another, and he has to do that because of the requirements to report what he is investing because of rules related to companies with over $100 million in available to invest.
George Soros and Gold
Why is it that George Soros has said recently gold was "the ultimate asset bubble," and then not long before pour a ton of his money into it?
It think it's a little game Soros is playing in an attempt to throw investors off his trail, throwing out some confusion to keep them from putting some skin in the game.
There isn't a gold bubble right now, and historically a bubble of any sort is when the everyday person is throwing their money at something for the sole reason that everyone else is doing it. Until we see the average person on the street investing in gold, it won't be in a bubble.
This of course doesn't mean there won't be any corrections, just that a bubble is something that is going to burst, and until conditions change drastically, gold will be as solid as a performer as any other investment sector.
It's obvious George Soros is playing a little game by saying one thing while doing another, and he has to do that because of the requirements to report what he is investing because of rules related to companies with over $100 million in available to invest.
George Soros and Gold
Thursday, February 18, 2010
George Soros, Marc Faber, John Paulson, Jim Rogers All Buying Gold
George Soros, Marc Faber, John Paulson, Jim Rogers
One thing I learned a long time ago was to ignore most the chatter and look at what people are really doing with their money, rather than what they assert.
In that regard, George Soros, Marc Faber, John Paulson and Jim Rogers, based on their actions and holdings, think gold is an extremely valuable asset to hold during these turbulent economic times.
George Soros is the latest to put his money into gold, specifically via the world's largest gold exchange-traded fund (ETF) - SPDR Gold Trust. Paulson is also known to have large holdings in SPDR as well.
Faber and Jim Rogers have both stated they have significant gold holdings, and while not selling any, are always waiting for gold market corrections to invest more, which I would think they did recently.
So even though some say we're in a gold bubble, even Soros, look at where he placed his money to see if he in fact really believes that. If he did, he wouldn't have took the actions he did.
George Soros, Marc Faber, John Paulson, Jim Rogers
One thing I learned a long time ago was to ignore most the chatter and look at what people are really doing with their money, rather than what they assert.
In that regard, George Soros, Marc Faber, John Paulson and Jim Rogers, based on their actions and holdings, think gold is an extremely valuable asset to hold during these turbulent economic times.
George Soros is the latest to put his money into gold, specifically via the world's largest gold exchange-traded fund (ETF) - SPDR Gold Trust. Paulson is also known to have large holdings in SPDR as well.
Faber and Jim Rogers have both stated they have significant gold holdings, and while not selling any, are always waiting for gold market corrections to invest more, which I would think they did recently.
So even though some say we're in a gold bubble, even Soros, look at where he placed his money to see if he in fact really believes that. If he did, he wouldn't have took the actions he did.
George Soros, Marc Faber, John Paulson, Jim Rogers
Wednesday, February 17, 2010
Gold Bull Market Over?
Gold Bull Market
I find it hilarious when clueless people attempt to make assertions like those I've been hearing lately that the bull market in gold is over.
The primary ignorance of some of those making these assertions is that the recent increase in gold prices has been because of gold bugs, rather than market forces, or in this case: lack of force in the market.
For some reason, people seem to resent or reject the fact that gold performs strongly when adverse economic and world conditions are uncertain, and we have been in that situation for several years, and will continue to be for many more.
Anyone who asserts gold bugs are behind the run up in gold prices understands nothing about historical responses to tough economic circumstances, the extreme printing of money, and the inevitable inflation that follows.
Add to that the sovereign risk associated with a growing number of countries, along with rising inflation, and you have a perfect economic storm for the rise in gold prices to continue, and they will.
What about the so-called gold bubble some think we're in? There's no evidence of it, on the contrary, for the most part institutional investors are the primary investors in gold, and until the general population enters into the sector, there will not be, neither can there be, a gold bubble.
Gold has a great future over the next several years, and possibly longer, depending on the rate of inflation and how long it'll take to realize we are still in the middle of a recession.
Once that happens, we'll see gold surge even higher, and those positioned to take advantage of that should enjoy strong profits from gold investing for a number of years to come.
Gold Bull Market
I find it hilarious when clueless people attempt to make assertions like those I've been hearing lately that the bull market in gold is over.
The primary ignorance of some of those making these assertions is that the recent increase in gold prices has been because of gold bugs, rather than market forces, or in this case: lack of force in the market.
For some reason, people seem to resent or reject the fact that gold performs strongly when adverse economic and world conditions are uncertain, and we have been in that situation for several years, and will continue to be for many more.
Anyone who asserts gold bugs are behind the run up in gold prices understands nothing about historical responses to tough economic circumstances, the extreme printing of money, and the inevitable inflation that follows.
Add to that the sovereign risk associated with a growing number of countries, along with rising inflation, and you have a perfect economic storm for the rise in gold prices to continue, and they will.
What about the so-called gold bubble some think we're in? There's no evidence of it, on the contrary, for the most part institutional investors are the primary investors in gold, and until the general population enters into the sector, there will not be, neither can there be, a gold bubble.
Gold has a great future over the next several years, and possibly longer, depending on the rate of inflation and how long it'll take to realize we are still in the middle of a recession.
Once that happens, we'll see gold surge even higher, and those positioned to take advantage of that should enjoy strong profits from gold investing for a number of years to come.
Gold Bull Market
Friday, January 29, 2010
George Soros: Gold "Ultimate Bubble"
Gold "Ultimate Bubble"
Leftist, liberal billionaire George Soros said recently at the World Economic Forum in Davos, Switzerland that the "ultimate asset bubble is gold."
Soros was quoted in The Telegraph as saying, "When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment."
While Soros may know currencies, I'm not sure that he's right on this assertion, as the pieces in place at this time lean toward gold maintaining and increasing in price going forward.
Contrary to government assertions and mainstream media parroting those assertions, we aren't in an economic recovery, and probably won't be for several more years; and even then it will probably be a weak recovery.
Although there is a weak and quiet attempt by the Federal Reserve to unwind its debt, that isn't going to happen any time soon, and the central banks around the world are continuing to print money out at unprecedented levels.
And even if there are the rumblings of a real and sustainable recovery, there is sure to be strong inflationary pressures as consequences of printing out all that money as well as growing demand for commodities from emerging economies.
While I have no doubt there will be continuing corrections in gold, and we're probably in the midst of one at the time of this writing, even so, the price of gold will continue to go up for some time to come, and I don't see how the Federal Reserve can get out of the trap it has created for itself, which would have a possible negative impact on gold prices.
The problem with Soros is he thinks just because the price of gold has been sustained for some time and has grown significantly that it reflects a bubble scenario.
As others like Jim Rogers have pointed out though, the reason gold isn't in a bubble is the regular investor on the street hasn't even started investing in it yet, and once that happens, the possibility of a real gold bubble could occur. Until that is, it's not speculation and the same types of forces that caused the real estate bubble which are driving gold prices.
Because of that I believe Soros is completely wrong here and is reading the market incorrectly. Gold price correction? Yes. Gold bubble? Nowhere near it yet.
Gold "Ultimate Bubble"
Leftist, liberal billionaire George Soros said recently at the World Economic Forum in Davos, Switzerland that the "ultimate asset bubble is gold."
Soros was quoted in The Telegraph as saying, "When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment."
While Soros may know currencies, I'm not sure that he's right on this assertion, as the pieces in place at this time lean toward gold maintaining and increasing in price going forward.
Contrary to government assertions and mainstream media parroting those assertions, we aren't in an economic recovery, and probably won't be for several more years; and even then it will probably be a weak recovery.
Although there is a weak and quiet attempt by the Federal Reserve to unwind its debt, that isn't going to happen any time soon, and the central banks around the world are continuing to print money out at unprecedented levels.
And even if there are the rumblings of a real and sustainable recovery, there is sure to be strong inflationary pressures as consequences of printing out all that money as well as growing demand for commodities from emerging economies.
While I have no doubt there will be continuing corrections in gold, and we're probably in the midst of one at the time of this writing, even so, the price of gold will continue to go up for some time to come, and I don't see how the Federal Reserve can get out of the trap it has created for itself, which would have a possible negative impact on gold prices.
The problem with Soros is he thinks just because the price of gold has been sustained for some time and has grown significantly that it reflects a bubble scenario.
As others like Jim Rogers have pointed out though, the reason gold isn't in a bubble is the regular investor on the street hasn't even started investing in it yet, and once that happens, the possibility of a real gold bubble could occur. Until that is, it's not speculation and the same types of forces that caused the real estate bubble which are driving gold prices.
Because of that I believe Soros is completely wrong here and is reading the market incorrectly. Gold price correction? Yes. Gold bubble? Nowhere near it yet.
Gold "Ultimate Bubble"
Friday, January 1, 2010
Jim Rogers Gold Bubble 2010
Jim Rogers Gold Bubble 2010
Jim Rogers was talking investing in 2010 recently, and he said the continual concerns about the possibility of a gold bubble are unfounded, and still maintains the position that gold will eventually reach $2000 an ounce, although when that will happen of course can't be known.
Rogers added that gold is going up in price because of the falling value in the U.S. dollar, concerns over inflation, consumption of gold by China and India, and the buying up of gold by central banks.
The only bubble Jim Rogers is concerned about is one in the U.S. government bond market. Otherwise he said there isn't another bubble he sees emerging anywhere.
If there's a reason for gold prices rising, there isn't a bubble, according to Rogers. It's when everyone starts buying gold without knowing why is when you need to be concerned about a gold bubble.
As of now, the majority of people on the street haven't even looked to gold as an investment, so concerns that way are irrelevant.
For the short term, the price of gold could be affected by a temporary strengthening of the U.S. dollar, which could drive prices down for a little while. Other than that, Jim Rogers and most others believe gold will continue on its upward run in price for a long time ahead.
Jim Rogers Gold Bubble 2010
Jim Rogers was talking investing in 2010 recently, and he said the continual concerns about the possibility of a gold bubble are unfounded, and still maintains the position that gold will eventually reach $2000 an ounce, although when that will happen of course can't be known.
Rogers added that gold is going up in price because of the falling value in the U.S. dollar, concerns over inflation, consumption of gold by China and India, and the buying up of gold by central banks.
The only bubble Jim Rogers is concerned about is one in the U.S. government bond market. Otherwise he said there isn't another bubble he sees emerging anywhere.
If there's a reason for gold prices rising, there isn't a bubble, according to Rogers. It's when everyone starts buying gold without knowing why is when you need to be concerned about a gold bubble.
As of now, the majority of people on the street haven't even looked to gold as an investment, so concerns that way are irrelevant.
For the short term, the price of gold could be affected by a temporary strengthening of the U.S. dollar, which could drive prices down for a little while. Other than that, Jim Rogers and most others believe gold will continue on its upward run in price for a long time ahead.
Jim Rogers Gold Bubble 2010
Friday, December 11, 2009
Few People Invested in Gold
One of the major reasons cited by a number of experts as to why we're not in a gold bubble is the fact that very few in main street America have gravitated toward gold as a key part of their investment strategy.
When the time comes when people respond to gold increasing in price to the point it can't be ignored, a lot of the upward movement will already have happened, and the resultant surge in the price of gold at that time probably will be a bubble. But for now, it's not even close to that point, and little is changing in the printing of money by central banks around the world to change gold from being an important investment over the next decade.
Investors like Jim Rogers say they wouldn't think of selling gold any time soon, and once it drop in price some, are ready to buy up even more.
Even so, silver is probably the better way to invest in commodities and precious metals at this time, as it's still 70 percent off its highs, while gold continues to flirt with highs on a daily basis.
Other good commodity investment vehicles to participate in for most would be commodity indexes, according to Jim Rogers.
Rogers also believes investors should familiarize themselves with foreign currencies, as there will be a lot of opportunities in the years ahead to make money in that commodity sector as well.
Rogers has been buying the U.S. dollar, even though he knows its doomed over the long term. He believes there will be a nice upward movement based solely on how bearish most investors are in the greenback at this time. Over the long term, he still remains bearish on the U.S. currency.
When the time comes when people respond to gold increasing in price to the point it can't be ignored, a lot of the upward movement will already have happened, and the resultant surge in the price of gold at that time probably will be a bubble. But for now, it's not even close to that point, and little is changing in the printing of money by central banks around the world to change gold from being an important investment over the next decade.
Investors like Jim Rogers say they wouldn't think of selling gold any time soon, and once it drop in price some, are ready to buy up even more.
Even so, silver is probably the better way to invest in commodities and precious metals at this time, as it's still 70 percent off its highs, while gold continues to flirt with highs on a daily basis.
Other good commodity investment vehicles to participate in for most would be commodity indexes, according to Jim Rogers.
Rogers also believes investors should familiarize themselves with foreign currencies, as there will be a lot of opportunities in the years ahead to make money in that commodity sector as well.
Rogers has been buying the U.S. dollar, even though he knows its doomed over the long term. He believes there will be a nice upward movement based solely on how bearish most investors are in the greenback at this time. Over the long term, he still remains bearish on the U.S. currency.
Thursday, December 10, 2009
Is There a Gold Bubble?
A lot of people don't understand the dynamics that make up financial bubbles, and it's not simply the fact that prices of a stock, commodity, or real estate is skyrocketing, it's more related to who is driving those prices up and for what reasons. And that is true with gold futures, gold prices, gold production and gold mining companies, or many other of the precious metals as well.
There really isn't a bubble until the general public begins to invest in something. The fact that they have no idea why they're investing other than they're hearing about it on the news and around the water cooler. That's what results in bubbles, not prices rising for good reasons.
Gold prices are rising for real reasons, and the majority of those investors aren't main street America or mainstreet other countries as well. Until that happens, there will be gold futures price corrections, but not the collapse of what some consider a bubble, as a gold bubble hasn't arrived yet, as most Americans still don't understand or recognize the value of gold; it hasn't entered into their minds yet. Once it does, then we'll have a good chance of seeing a gold bubble. Until then, we should be sure gold will continue to have support and prices will continue to rise over a period of time.
A number of countries, like China and India continue to stock up on physical gold, knowing the infaltionary pressures ahead, as well as the ongoing collapse of the value of the U.S. dollar. Other major investors have also focused on investing in physical gold and gold futures in preparation for the continuing increase in the price of gold for years ahead.
With the price of gold growing fast, it doesn't mean it's in a bubble like we've been talking about, but it could be due for a correction, or at least we should probably hold off until it pulls back a little, and watch how it responds from there.
Gold mining stocks are also at high multiples at this time, making them very expensive to own. In general, it's a time to hold gold and not buy too much. At the same time, I wouldn't sell any gold at all any time soon.
There really isn't a bubble until the general public begins to invest in something. The fact that they have no idea why they're investing other than they're hearing about it on the news and around the water cooler. That's what results in bubbles, not prices rising for good reasons.
Gold prices are rising for real reasons, and the majority of those investors aren't main street America or mainstreet other countries as well. Until that happens, there will be gold futures price corrections, but not the collapse of what some consider a bubble, as a gold bubble hasn't arrived yet, as most Americans still don't understand or recognize the value of gold; it hasn't entered into their minds yet. Once it does, then we'll have a good chance of seeing a gold bubble. Until then, we should be sure gold will continue to have support and prices will continue to rise over a period of time.
A number of countries, like China and India continue to stock up on physical gold, knowing the infaltionary pressures ahead, as well as the ongoing collapse of the value of the U.S. dollar. Other major investors have also focused on investing in physical gold and gold futures in preparation for the continuing increase in the price of gold for years ahead.
With the price of gold growing fast, it doesn't mean it's in a bubble like we've been talking about, but it could be due for a correction, or at least we should probably hold off until it pulls back a little, and watch how it responds from there.
Gold mining stocks are also at high multiples at this time, making them very expensive to own. In general, it's a time to hold gold and not buy too much. At the same time, I wouldn't sell any gold at all any time soon.
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