Beware the gold bubble
The run-up in price to more than $1,000 an ounce has investors excited. But market fundamentals point to a decline.
By Scott Cendrowski, reporter
Last Updated: October 7, 2009: 4:05 AM ET
money.cnn.com
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Be sure to watch the video that is embedded in the article at the above link. At the 2:12 mark, the "best argument" against owning gold, which they got from the comments section, is from Joe Villani. Joe says:
"The simple law of supply and demand will keep it from rising. We don't really need it. As the price goes up, demand goes down. More importantly supply goes up, the supply floods the market, and prices go back down."
Thank you, Joe, for that rigorous analysis of the gold market. I had no idea that gold mines have a spigot which can be cranked open to spew out gold at any desired rate. I guess you learn something new every day. I hope everyone here has gold flood insurance, sounds like we will be awash in the stuff very soon now. |
