Gold Is In A Bubble That Is Going To Burst

[Potemkin]

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

James Altucher

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

[Ought Six]

If you view gold as nothing more than a short-term investment, then the threat of a possible market correction is valid. I do not view gold that way.

[Ross]

Hah ! when such commentators cannot think of a single reason
why gold will go higher you know they are totally clueless or paid
shills .

There maybe corrections along the way but when money is printed
like confetti for political expediency and is backed by government debt
not government assets holding gold can hardly be worse than holding dollars.

[Malcolm]

The only thing pumping Gold so high is "Fear"
As long as packages of explosives are still being found on aircraft and Muslims keep blowing themselves up ..............and Guantanamo Bay stays open the price of Gold will continue to climb. If you turn on the telly one morning soon and a large number of citys have turned to ash under mushroom clouds ....the hype of what "MIGHT" happen will be over and .....well what will you do with all the Gold "Eat It"

[Ought Six]

History shows that PMs are still useful in even the worst of crisises. Gold has a particular effect on the human psyche, and there is always somebody willing to accept it in trade.