"The Real Bubble is Gold: and It's Deflating," writes MKM's Mike Darda, who says the key turning...

"The Real Bubble is Gold: and It's Deflating," writes MKM's Mike Darda, who says the key turning point was the metal's (GLD. IAU) failure to rally in wake of last fall's QE∞ inception. "Investors simply took it at face value that gold was soaring and would continue to rise because of (the Fed)." Inflation picking up will be even worse for gold, he says, as this would make the Fed an aggressive tightener of policy.
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Comments (23)
  • mcostigane
    , contributor
    Comments (44) | Send Message
    what an utterly clueless comment
    23 May 2013, 11:57 AM Reply Like
  • Guardian3981
    , contributor
    Comments (2391) | Send Message
    Gold performs best in stagflation, sometime this year the market started believing that the US will actually grow and get out of stagflation.
    23 May 2013, 12:00 PM Reply Like
  • roojoo
    , contributor
    Comments (178) | Send Message
    I don't know this guy and he doesn't seem worth knowing.
    23 May 2013, 12:03 PM Reply Like
  • Doug Eberhardt
    , contributor
    Comments (4487) | Send Message
    So because the QE from Bernanke is being swallowed up by the ongoing credit contraction, it's gold's fault?


    You can bet, no matter what Bernanke said yesterday, that the Fed has to continue inflating to fight the deflation. Bernanke had told us this is what he will do. One blip in the price of gold going down after 12 straight years higher, and all of a sudden everyone's coming out against gold. Where were they the last 12 years?


    And by the way...this year is not finished and the 12 straight year record is intact. My next article is a bullish gold and silver article. Can't wait for the haters responses!
    23 May 2013, 12:05 PM Reply Like
  • Interesting Times
    , contributor
    Comments (14668) | Send Message
    Another insignificant article? Why ?


    Gold seems to attract posters I assume.. I just don't get some of these comments!!
    23 May 2013, 07:47 PM Reply Like
  • thrash
    , contributor
    Comments (140) | Send Message
    - And Mike Darda is who ?
    23 May 2013, 12:20 PM Reply Like
  • dlecur
    , contributor
    Comments (2) | Send Message
    Whether there is a bubble or not, one thing is for sure: how closely GLD follows physical gold. I certainly believe that there is a lot of manipulation in the market, just my feeling.
    23 May 2013, 12:26 PM Reply Like
  • jcat3022
    , contributor
    Comment (1) | Send Message
    oh dear god. Yet another know-it-all that knows nothing about gold or its role as money.


    my advice: use any extra fiat every month an buy gold. Physical gold, not GLD that the criminal bankers can toy with. Put it away and wait patiently because you will be rewarded over the long haul.
    23 May 2013, 12:27 PM Reply Like
  • Stepman
    , contributor
    Comments (17) | Send Message
    Continue to $tack for real value. Gold and $ilver coins.
    23 May 2013, 12:34 PM Reply Like
  • youngman442002
    , contributor
    Comments (5123) | Send Message
    There is a much bigger world out there than just the US Stockmarket and our inflation....much bigger...and they like gold...and they do not like the US dollar that much...
    23 May 2013, 12:55 PM Reply Like
  • Ivan the Fool
    , contributor
    Comments (96) | Send Message
    Dear Doug, here's some hate for you: The entire world marketplace is experiencing a deflating bubble due to all of us living beyond our means for far too long. The recession has barely begun. The next 12 years are going to be very different than the last 12 years. Our world trade patterns are changing dramatically and rapidly. Many countries are trying to distance themselves from the U.S. and find new ways to import/export or increase domestic output. We have become highly dependent on the resources of other nations. We will become much more dependent on domestic production in the near future - out of necessity. People already realize that the ship is sinking - that's why they are turning to PM. There is a wide-spread myth that gold must go up when growth stocks go down and visa versa. While this is generally true, it is not always true. When is it not true? When people really don't have extra money to spend. In this case, both gold and equities lose value because people need the money for necessities. At some point, beans become more valuable than nuggets of shiny gold. Essentially, by hanging on to the myth of gold as the safe-haven, you are expressing optimism. You must believe that all this stuff is going to work itself out in a relatively short period of time. I don't. I guess I'm a hater.
    23 May 2013, 01:08 PM Reply Like
  • evan.prospect
    , contributor
    Comments (702) | Send Message
    People have eaten beans for thousands of years for food...people have also used gold as a medium/currency of exchange for thousands of years. PMs generally have a negative beta and thus usually move in the opposite direction of the equity markets as seen from the beginning of this year to today.


    As for world trade patterns, they have already changed significantly over the last 20 years with China and India's rise and China joining the WTO. The biggest change in the last 5 years has actually been the USA producing much more of its own oil and natural gas, which has helped domestic job growth, the trade deficit, US consumers (lower NG prices means lower electricity prices), and US Industry (lower NG prices mean lower inputs for chemical and fertilizer companies, others as well).


    That's not to say we won't have some mild or moderate deflation over the next few years but a lot of your thesis is premised on false assumptions and info.
    23 May 2013, 01:55 PM Reply Like
  • clarkjdjr01
    , contributor
    Comments (12) | Send Message
    You make some good points. However, you will have to buy or trade for the beans with something. Gold and silver will buy beans. If you get it now it is cheaper than later when stagflation reduces the value of your cash. You may not realize that the US is on the road to energy independence through oil and gas fracking. This should help us with trade for almost anything we need to import. Canada and US together will be the new great energy cartel for the world. It will take a few years but it will happen soon.
    23 May 2013, 02:22 PM Reply Like
  • clarkjdjr01
    , contributor
    Comments (12) | Send Message
    You got it right.
    23 May 2013, 02:22 PM Reply Like
  • Ivan the Fool
    , contributor
    Comments (96) | Send Message
    Evan: No doubt, I am full of false assumptions. I admit that I am a Fool. While domestic energy production may signal growth to you, to me it signals preparedness for the possibility that we will not be able to import enough to cover our needs. People have eaten beans and traded in gold for thousands of years - yes - and they have also slaughtered one another in order to control the beans and gold. I have read the stories of competition to see who can make the heads of children roll the furthest after lopping them off and the whipping to death of young servants for burning the master's waffles. Maybe those were isolated events that reveal nothing of our nature. I will stick to my assumption, however, that many of you are overly optimistic as to how this is going to play out. There are scenarios where it is fathomable that the imports stop arriving and one could buy more gold with the beans than visa-versa. Am I a Doomsdayer? Not exactly, but there are many indications that tensions between nations are escalating. I believe that the moves of the fed are reflective of "national security" issues. I am not "seeking alpha," so maybe I should stay off of this forum.
    24 May 2013, 10:48 AM Reply Like
  • Ivan the Fool
    , contributor
    Comments (96) | Send Message
    From what I understand, fracking and NG are not going to be enough to satisfy our energy needs - thus the push for alternative energies. What do you make of Warren Buffet's Sunpower move? Ahead of you a bit on the bean thing - I have already traded paper for a decent stockpile of necessities - which includes a lot of beans. I am only preparing for a couple of weeks of power-outages and just generally trying to save money by buying now while I can afford it. Preparing beyond that starts to make me feel like a psycho. I too am a fan of Canadian mining companies even though I shorted them a while back. Just repurchased this morning, in fact. The recent Soros purchases seem to indicate that the turning is imminent. It is my belief that mining stocks will soon outpace PM. Honestly though, I am not at all confident in any of my analyses these days - way too much volatility. Watching stocks used to be fun - now it is too stressful. I'm not investing another dime in the stock market after today - going long with ALL of my picks and letting them ride - win or lose - I'm getting out of this game. This will be my final posting - I'm sure you all care. I am going to start focusing on my children and enjoying what's left of this short journey called life. Good luck to you all. PEACE.
    24 May 2013, 11:32 AM Reply Like
  • John Wilson
    , contributor
    Comments (1902) | Send Message
    Your case makes sense and I agree with in principal with what you say, especially, people not having enough discretionary money to buy gold, except in my case it doesn't make me a hater (of gold) - it makes me a hater of the the policies and abuses that got us here. It is not the fault of gold. It is abuse of government - political power, and money and credit. My course of action is to prepare for the collapse of the corrupt institutions that have been controlling things. That preparation includes gold and silver. The current system is failing, worse than you anticipate.
    24 May 2013, 12:51 PM Reply Like
  • clarkjdjr01
    , contributor
    Comments (12) | Send Message
    Naked shorts of Bank(s) keep Au and Ag manipulation going with Fed and Governments' backing. Will this ever end? (I don't know.) Leverage of the shorts is very high. Germany is being forced to wait 7 years for physical delivery of their gold from US. Some day this corruption will blow sky high. When/how long is the big question.
    23 May 2013, 02:14 PM Reply Like
  • CassandraSees
    , contributor
    Comments (529) | Send Message
    Beware of disinformation - - As was asked before "Who is Mike Darda" - - Does he look at gold as a day trader, or a piece of paper or physical, long term hold? - - What are his intentions? - - Does he swim with whales or those of similar ilk? - -
    23 May 2013, 03:08 PM Reply Like
  • churn
    , contributor
    Comments (206) | Send Message
    Mike its way too early to make such an assumption. This economic cycle is just beginning and the new metals may be in demand by the ton much as the old metals were in the old industrial cycle. Get it?
    24 May 2013, 06:02 AM Reply Like
  • Orionds
    , contributor
    Comments (3) | Send Message
    The tech bubble did not signal the end of tech. In fact, tech has grown stronger without the lemming mentality that brought about the bubble, so will gold in the longer and even middle term.
    24 May 2013, 07:02 AM Reply Like
  • Ivan the Fool
    , contributor
    Comments (96) | Send Message
    Orionds - though tech industry seems to be doing well with many advances in different sectors, the 2000 tech collapse damaged many emerging technologies that are competitors to the old guard. Who knows how far we may have come without the collapse. And while gold may rebound, there seems to be a similarity with the tech bubble of 2000 and the other major bubbles - insiders manipulating the markets with large buying and selling. Personally, I don't believe that normal "market conditions" account for the tech collapse or the more recent decline in gold prices. Some may think such opinions are conspiratory, but the history of the world is essentially the powerful taking from the common citizen. Gold can be manipulated too - especially these days with the technological capacity to trade large numbers of shares in seconds.
    30 May 2013, 12:52 AM Reply Like
  • Oxyman
    , contributor
    Comments (133) | Send Message
    Damn, every time I bought the mine (NEM), I got the shaft! Think I will sit this one out for a while........ and see whar-she-blows.....
    27 May 2013, 03:56 PM Reply Like
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