calling gold a bubble is akin to calling credit default insurance a bubble in 2007. Every bubble has a counter trade, and the opposite side of the credit bubble in real estate was the cdi. Gold is the counter trade to the currency bubble, not the other way around, unless, of course you find a sense of comfort in the us$.
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IBM=1 piece of paper saying you have $116 ownership in the company. Try and have them liquidate to collect it. GLD trades on its current value same as any stock or investment. What fears buggers have of collapse have little to do with modern investment. Their main bet is the collapse of the world economic system, in which case physical gold may be the best bet. I see a lot of opportunity between now and then, and gld serves my needs.
Well said kid. Buggers are of the same ilk as the unabomber, social misfits, paranoid skids, nerdy loners, etc. etc. What they cannot understand is inherent risk and value. Pros can gloss and charm a stock until it has a value exceeding its intrinsic worth, and they are considered smart. The stock may be AAPL or it may be AIG. In ANY investment there are risks as to the viability, value, longevity, or credibility. Why the buggers get after GLD makes little sense, but its their little entertaining ant farm, let em have their fun.
investing is more about perception and less about real value. Real value cannot be determined in a macro sense, and therefore it's a fluid determination. The only thing that matters is the difference between what you buy it for and what you sell it for. Who cares what the return on gold(or any other investment) is while I hold it. I will see my real return upon selling. If I could buy mud and resale it for a profit, it would matter little to me if it is universally accepted as currency, politically acceptable, edible, sought after, etc., etc.. If I feel someone will PERCEIVE what I'm selling to be of more value to them, than what I purchased it at, then that's a good investment. If they pay less, my perception of its value was off. Gold could be cow dung for all I care. I own it because I believe someone will buy it from me for more than I paid. Period.
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gold isn't money? EVERYTHING is money, marbles, toothpicks, rocks, and on and on. If it can be traded, it's worth will be determined by another party. You can accept the trade or not. What you pay and what you accept in trade is up to you. If you don't like the medium being used, you don't make the trade........DUH!!
Cost of risk for being in GLD vs. the physical metal is the 8-10% premium on physical + storage. Like any investment, gamble one way or the other on the risk. If it's (GLD) a cheesy piece of worthless paper, I'll happily buy it if I can sell it at a good return, regardless of how a bug feels about it.
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i noticed gold traded above it's "normal trading range" on multiple days in Jan., Feb., and March? How is that possible? Shouldn't it stay in it's normal range? What was the recommendation in early Jan. after it's first spot over the range? Also, could you show the "normal trading range for the next 12-24 months?
if the stimulus dollars stay in the bank and don't circulate, sure, you could have deflation. but eventually, creditors will need to be paid. fed will not allow the banks to hold on to the money, velocity will pick up, and the expanded money supply will feed the inflationary elephant in the room.
gold is nothing more or less than money, exchangeable in any nations currency. i could care less what it's done historically, i care about what it's current and future value may be. find me another "money" that will react in a positive manner toward the events shaping our current environment, (I see everyone loaded with new dollars but unable to afford anything) i cannot see the USD or, for that matter, any currency, standing stronger after the printing presses get done making the currency to stimulate the global economy.
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