Gold - Don't Buy The Dip Yet

| About: SPDR Gold (GLD)

I've read all sorts of threats like: "Not putting 10% of your wealth in gold is extraordinarily imprudent today and a recipe for further financial destruction." If you've been following me, my perspective is that Gold really isn't a currency. It's not really a store of wealth. It's a tool of speculation on the price of gold. It's a commodity that used to be a currency and is popularized for this reason. Apparently, there are business models that involve people digging this stuff out of the ground to put it back into the ground. I frequently see people on the side of the road these days holding up signs suggesting that I should stop by their establishment and trade gold with them. As laughable as it all is to me, I do believe that there are enough people out there who can be convinced of anything to drive what is currently just a large bubble into an epic bubble.

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Hypothesis: Supply and Demand Drives Price

If you ask me, demand is presently unsustainably high, especially when you have entire nations withdrawing their gold reserves and shipping them transatlantic because they are afraid of threats that don't exist.

A Parable from the Bible - Luke 19:11-28

There's a parable from the Bible that I think is fairly useful in regard to measuring economic benefit. Basically a master gives to his servants equal amounts of gold and two of them use their gold to create value while the other one buries it. The one that buries it has it taken away and the ones who invest it wisely are given more. To him who has, more will be given. To him who has not, even that which he has will be taken away. Gold is not an investment. I've been writing about this much before this crash today.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.