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I've been investing for a long time. I've lived thru two bubbles already- the dotcom bubble and the housing bubble. I lost money in the first and made a killi

by nika 15y ago

I've been investing for a long time. I've lived thru two bubbles already- the dotcom bubble and the housing bubble. I lost money in the first and made a killing in the second. I won't say whether this is a bubble or not, but the number one thing I look for is businessweek (or newsweek) saying that "things have changed!" A mainstream publication putting the bull market on its cover is the prime indicator that it is a bubble and that it will be a painful crash. It is almost a cliche. The real bubble right now is in the dollar. We've been able to inflate, an export that inflation, for nearly 100 years, and we got away with it because of military might and manufacturing might (and bretton woods). 2 of those 3 are gone and the last one is losing respect rapidly. It is gonna be a bloodbath when those dollars come home to roost. (and it will kick off a bubble in gold.) Maybe the bursting of this "tech bubble" (if we're in one) will be the trigger that causes the end of the dollar bubble. Unfortunately I'm not aware of business week putting the dollar on the cover and saying "This time its different". (But maybe one of their covers for gold will count.)

daniel1980fl 15y ago
nika, good input! one insight though. I have a friend working high in hierarchy in one of the biggest precious metals trader in the world. He told me what you saying about gold (and other P.M.), but he said that White House is drafting an Executive Order for president (Obama if still?) to actually ban sell and export of P.M. you see, they know when dollar loose its green face, it will be nothing more than paper, and then P.M. will soar. In order to stop or slow it down, the government will be entitle to take ownership over your precious metals (it happened in the past!) and cruel penalties will apply if you do not submit. further to cool of the US market it will be forbidden to import/export not to create a shell in US for cheap/expensive p.m. tradeoff. The biggest trade houses are advising clients to stash pm. or certificates in foreign countries. he also told me they lobby hard to allow IRS to tax other-than-bullion P.M. Right now, as you know, you dont need to report gold and silver coins to the IRS (bullion only). I think you are right about the bubble, but this one will be "revert-bubble": it will grow naturally through market need, but will be artificially killed by US government and its sanctions. I have 80% of wealth in us silver great eagle/canadian coin since $21. I think we will see $100 on it, but I may be wrong.
powertower 15y ago
The interesting thing about the gold market is that there is 40x more "paper" gold ownership then there is actual gold in the world. They can do this because the rules say if someone calls in their gold, they can just give them the value of it in dollars if there is not enough metal to cover it.

by nika 15y ago

daniel1980fl 15y ago

nika, good input! one insight though. I have a friend working high in hierarchy in one of the biggest precious metals trader in the world. He told me what you saying about gold (and other P.M.), but he said that White House is drafting an Executive Order for president (Obama if still?) to actually ban sell and export of P.M. you see, they know when dollar loose its green face, it will be nothing more than paper, and then P.M. will soar. In order to stop or slow it down, the government will be entitle to take ownership over your precious metals (it happened in the past!) and cruel penalties will apply if you do not submit. further to cool of the US market it will be forbidden to import/export not to create a shell in US for cheap/expensive p.m. tradeoff. The biggest trade houses are advising clients to stash pm. or certificates in foreign countries. he also told me they lobby hard to allow IRS to tax other-than-bullion P.M. Right now, as you know, you dont need to report gold and silver coins to the IRS (bullion only). I think you are right about the bubble, but this one will be "revert-bubble": it will grow naturally through market need, but will be artificially killed by US government and its sanctions. I have 80% of wealth in us silver great eagle/canadian coin since $21. I think we will see $100 on it, but I may be wrong.

powertower 15y ago

The interesting thing about the gold market is that there is 40x more "paper" gold ownership then there is actual gold in the world. They can do this because the rules say if someone calls in their gold, they can just give them the value of it in dollars if there is not enough metal to cover it.