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Google Trends: "Housing Bubble"
The popularity of the "housing bubble" theories peaked in mid-2005. Using hindsight, the housing market did crash over the next few years.
Google Trends: "Oil Bubble"
The popularity of the "oil bubble" theories peaked in the spring of 2008. The crash came later that year.
Here's a chart showing the popularity of "China Bubble" theories. "Gold Bubble" theories have just now turned popular too.
Google Trends: "China Bubble"
Google Trends: "Gold Bubble"
Is there a connection?
Oil, Metals Get Over a Hump
"If you look at the drivers behind commodities, it's really the fact that growth is around the corner," said Bob Tull, chief operating officer of Old Mutual Global Index Trackers. "The economy looks like it's turning around here, and China's made some positive statements."
How China Is Moving Dollar, Oil & Gold: Experts
“If you look at gold’s activity this year, every time we’ve had monetary tightening, or we’ve had comments from the Bank of China, or from commercial banks reducing loans, gold has tended to sell off with other commodities,” Steel added.
The Timeless Allure of Gold
Entire countries have jumped on the gold band wagon of late, with India purchasing 200 tons in November, the single largest purchase of the commodity by a government central bank in three decades. Recent rumors that China is strongly mulling a big purchase similar to India’s have kept the price of gold above the $1,000 an ounce range, according to analysts.
It's a band wagon all right... China, gold, China, gold, China, gold.
For those who think that the best time to buy gold is when central banks are buying, I would like to point to the period between 1999 and 2002. It was without a doubt the best time in the last 30 years for the private investor to be buying gold. What were central banks doing? Selling.
Brown lost £2bn selling UK's gold
They have revealed that Bank of England officials had serious misgivings over the chancellor’s determination to sell 400 tons of bullion in a series of auctions between 1999 and 2002, when the price was at a 20-year low.
"The Financial Stability Implications of Digital Assets"
-
An interesting paper from researchers at the NY Fed: The Financial
Stability Implications of Digital Assets Here is the overview:
• This article considers...
4 hours ago
21 comments:
D****t Mark!
You know that gold is GYSC and I's sacred cow, but you insist on leading it down the chute to the slaughter house.
You just wait till you climb out of 'vault 101' and start eating 'squirrel on a stick', you'll wish you still had your gold then!
: )
watchtower,
Oh my! I didn't realize that there would be so much "fallout" from my post! ;)
If I thought my words would have even the slightest impact on your investments then I'd probably just keep my mouth... well... hmmm...
Time to install lots and lots of Cramer sound effect buttons and flashy graphics!! My precious!! My precious!!!
Woah. Where did that come from? Sorry about that. I was just barely able to get the ring off before it consumed my very soul.
Lets get him Watchtower!!!!!
I like your central bank point Mark, but of course it depends on the central bank. I do not think India was dumping gold when the UK was.
Gold has not hit bubble time yet IMO, and it may not as there is too little of it (real not paper) to be a widely held asset and it is too despised by Wall Street, Central Banks, and most writers.
Faced with a 3% devalued DONG in Vietnam, the masses are buying gold to keep their purchase power. Faced with printing presses running overtime in the Euro zone, UK, and the US some kind of tangible insurance must be held by countries and that is why many are buying or emoving their physical gold from overseas holding sites.
The rumored ban on CDS trading will only make the situation more unstable.
I love gold here and whether it goes to $5000 or $200 makes little diference as the value of the gold will still be there but the landscape will change around it.
My 2 cents, or $2.00 in super deflation or $0.00002 in hyperinflation.
Mark,
besides, leave gold alone, look at this aluminum bubble deflating story!:
http://www.businessinsider.com/the-secret-aluminum-shipments-that-show-china-is-de-stockpiling-its-commodities-2010-2
or
http://tinyurl.com/yhyyuta
I'm thinking that for the last twenty five years or so I should have been into obsolete Nintendo games instead of the market or gold:
Old Nintendo system sells for $13,105
"But it wasn't even the game itself that was worth the bulk of the money -- it was the original cardboard box, which collectors value at a breathtaking $10,000."
http://tinyurl.com/y9hqyy2
Obviously recession proof.
If I could have bought into Mab's 'Dow 10,000' hats I would have been set right about now.
What is an "ET: atari game dumped in the desert worth now?
Cllectibles are weird, I have the complete set of the Joe Dever series "Lone Wolf" choose your own adventure books and its worth about $3000 when I paid about $10. The Legends books are even more crazy, I am up about $16K! You never know!
PS,
No sale, these books are MINE!
GYSC,
I love gold here and whether it goes to $5000 or $200 makes little diference as the value of the gold will still be there but the landscape will change around it.
The same is and was said of landscape (real estate). Chinese investors are buying up real estate on the belief that it is a much better store of value than their currency. Time will tell.
watchtower (& GYSC),
"But it wasn't even the game itself that was worth the bulk of the money -- it was the original cardboard box, which collectors value at a breathtaking $10,000."
Cardboard box bubble!! ;)
In all seriousness, people are nuts!
Speaking of people who are nuts, I probably am too. I actually bet on them!
Card sharks - success of card game company Wizards of the Coast - Company Profile
http://findarticles.com/p/articles/mi_m0DTI/is_n10_v24/ai_18726434/
That promise of endless permutations captured the attention of fantasy-game fans seemingly overnight. Just three years after the game's debut, the company behind it, Seattle-based Wizards of the Coast, has sold more than 2 billion individual playing cards-usually in $8.95 packs of 60. Although the company won't divulge financial figures, its estimated to be at least a $50 million venture.
Indeed, the games growth is nothing short of magical. In 1993, Wizards of the Coast could barely cover its five-person payroll; Adkison was subsidizing the venture with his "very small investments" and the $30,000 salary from his job at Boeing.
I held those cards in my hand in the early days and thought something like, "People are nuts. There's no telling how many of these cards people might buy and collect." I was very optimistic.
In my wildest dreams I never imagined people were THAT nuts though. 2 billion cards sold in the first 3 years? That's 1/3rd of a card for every man, woman, and child on the planet. Yeah, like I was expecting that.
Of course, this can apply to gold too. There's no telling how much people might pay for a one ounce gold coin. I certainly would not bet against them.
Further, if gold did go to $5,000 an ounce that does not necessarily mean I have to be financially ruined in the process. It does not mean that my investments necessarily did poorly. People might just like collecting gold. More power to them. Who knows?
I did mention people are nuts though. Right? ;)
"Speaking of people who are nuts, I probably am too. I actually bet on them!"
Not to mention your meteoric rise to fame and fortune over the Halo series.
watchtower,
You want nuts? I'll give you nuts!
From 2007...
Open Halo 3 Tournament Boasts $1M Prize
http://www.1up.com/do/newsStory?cId=3164059
The million dollar payout is not actually a "winner-take-all" award, but rather represents the combined total prize money of the Halo 3 portion of the games. The crowned Xbox Halo 3 World Champion (the CPL's official title for "first place") receives an instant $250,000 cash payout for his/her time -- the other $750,000 gets divvied up in various ways between the next 64 people in line.
I don't even own an Xbox, much less a Halo 3 game, lol.
I do own Borderlands and a PS3 though. FUN!!
http://www.youtube.com/watch?v=81QCy6SSUQc
"Open Halo 3 Tournament Boasts $1M Prize"
I'll tell you one thing, you do know how to give back to your fan base.
Nicely played!
The World Series of Halo? (WSOH) coming to ESPN the ocho soon?
watchtower & GYSC,
At what point will this Halo teasing be over? Over. ;)
http://www.youtube.com/watch?v=diUWIr7Ub34
Did 'supersonic407' get your consent before making that parody, or the Family Guy creators for that matter?
I smell a lawsuit...over.
watchtower,
Free lunches. Over.
What? Did you say over? Nothing is over until WE decide it's over:
http://www.youtube.com/watch?v=V8lT1o0sDwI&feature=related
Anyway, I think I know how you feel. I've been waiting for years for David Lee Roth and Eddie Van Halen to patch things up.
Van Halo is one of my favorite bands.
http://www.youtube.com/watch?v=s6xqZpT7J9w
Van Halo? You too?
There is no escape for me. The year is 1979. It's like I'm on the Highway to Halo.
http://www.youtube.com/watch?v=PqwFfGgLPzM
A bubble in, say, shares, stocks or commodities happens when people believe it will "go up and up" (and is, as a rule, as with housing recently and "tech" stocks at the beginning of the millenium, again mainly driven by money inflation). Gold in contrast is a hedge against inflation and against looming sovereign defaults. Inflation by definition is the increase in money supply. There's no doubt that this has happened several fold in only two years. So there is inflation. Hence there is no gold bubble, as gold has not appreciated by a tenth even of what the monetary base has expanded!
CrisisMaven,
Thanks for your comments.
However, you might want to look at this. It isn't just the monetary base that has been expanding. Modern mining equipment also expands hard assets.
http://illusionofprosperity.blogspot.com/2009/11/quantity-theory-of-aluminum.html
http://illusionofprosperity.blogspot.com/2009/11/silver-to-aluminum-price-ratio.html
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