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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: orkrious who wrote (81967)5/23/2007 12:45:47 AM
From: Wyätt Gwyön  Read Replies (3) of 110194
 
if one considers the fundamentals that ARE actually of importance to gold...one can not explain the 1980-2000 bear market. it's impossible, since the period 1980-2000 has seen more debt creation

i think it's quite easy to explain: gold was in a bubble in the 1970s, so what happened to gold from 1980 to 2000 was a reaction to the previous bubble, just as what will happen in US housing going forward is a reaction to the bubble that has recently popped in housing. one could say the gold bubble of the 1970s anticipated future monetary debauchment and then some, just as one could say the subsequent gold pummeling anticipated and discounted future disinflation and then some. assets are rarely valued correctly, and then only by chance. still, fundamental values can be shown as regressions over a very long time period. most of the time assets are overvalued or undervalued relative to their long-term trend. even though i'm not a goldbug i do think gold theoretically has a fundamental value, but one can only determine it over very long time periods which are not practical to people whose investment horizons are less than half a century. even deducing the "fundamental" value of gold may only tell you a point it will regress to in the next 30 years. before that happens, it might go in an undesirable direction.
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