11 Signs That Gold Is In A Bubble That Is Going To Burst
James Altucher | Oct. 25, 2010, 10:14 AM | 167,214 | comment 84
I first wrote about gold in early July at WSJ.com. I took a lot of heat then but the jury is still out.
In fact, since July 9, stocks and gold have performed almost exactly the same.
But with stocks trading at record low multiples over earnings (versus bond yields) and with gold at an all time high I can think of 11 straightforward reasons why the Gold Bubble is going to burst and stocks are the primary place one should put their money.
- It has very few industrial uses.
- Gold has no dividend yield.
- Gold has no earnings yield.
- The US should start selling its gold to pay down its debt.
- Interest rates are at zero and the Fed is printing money.
- This guy can't carry the market forever
- Gold production is rising
- Gold sentiment is at an all-time bullish high
- Whenever we see gold sentiment at the levels in the below chart, prices tend to pull back, at least in the short-term
- Assets in the GLD ETF, the ETF which tracks gold, are also reaching a level usually associated with a top
- The Oracle is a huge gold bear
Read more: http://www.businessinsider.com/reaso...-burst-2010-10