well that's a question with many parts <g>
first of all, money printing and debt expansion both sovereign and non sovereign is on a scale never recorded before in written history.... which is to say, right now, which way are the bubble making winds blowing??
in '87 (post Volker) they blew into the general stock market with the entry of Greenspan to the FED.
in '98 they blew into the tech stocks and tech start ups. (this is where he really started to unleash the printing machine)
in 2003 they blew into the housing market
and right now, it is not quite certain where they are blowing, but to be sure, the bang for the buck becomes less and less, as the scale of debt, printing, and intervention has doubled and tripled, and now seems rather infinite, compared to the sought after rewards in each event in the series.
is it dumb money selling gold at the We Buy Gold stores? or is it money people need for whatever reason, vs. holding onto their either good or mostly cheap bling?? I regularly stop in at one of these places located in a mega supermarket. their clients are mixed..both rich and not so rich (poor if you like). I asked him last year.. if you believe gold is a good hedge against the destruction of the currency, and you tell the people who are bringing in their bling the same thing, then why are they selling it for currency. He said, he tells them to buy bullion with the cash he gives them, or silver or whatever. As far as he is concerned, the bling isn't gold. Bullion coin is gold.
at these prices.. it won't be the shoeshine boy who can buy gold and send the signal. it will be people with surplus cash.... and a certain kind of people with surplus cash, who will send the signal, if that is in fact, the signal for the top.
as to the issue of cycles, and I think that's a big issue... which is to say some brain dead analysts are still talking about it as if it/they are normal waves in the usual way. I don't think that's quite right. The math has been so incredibly distorted by both made up money, negatively priced risk in capital markets, and the pull of gi-normous debt pools against the push to hold up prices and markets by interventionist policy, distortion of property law and enforcement, and pools of made up money........ the cycles are fractured, hardly conventional, and assert themselves in both contrapunctal and disharmonious ways... i.e. a barrage of 12 tone asyncopated cacophony. and all that is rather mirrored in one way or another in the present state of the social order and in the relation between broad society and government. Positive outcomes have rather large hurdles, don't you think?
I don't know what the price of gold will be ultimately, but it will most likely never be zero in my life time. At which time, the last possible trade will be made. |
