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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Joe S Pack who wrote (58792)	12/11/2009 5:33:27 PM
From: TobagoJack	Read Replies (3) \| Respond to of 217574

just in in-tray player #1: I'm glad Roubini found the real bubble this time. The New Bubble in the Barbarous Relic that Is Gold Nouriel Roubini rgemonitor.com \| Dec 11, 2009 In recent months gold prices have risen dramatically, first breaching the US$1000 barrier, then jumping another 20% in the past few weeks, surpassing US$1200 before correcting downward again to around US$1100. Some gold-bug bulls say the gold price could eclipse US$2000 in the next couple years. Is that possible? Is the recent rise of gold prices justified by fundamentals? An analysis of the facts suggests that a good part of this rise in gold prices is driven by a bubble. player #2: the bubble is in his ego. player tj: we the faithful must focus on the single thought, that the bubble is in zero-marginal-cost paper money with secure claim on absolutely nothing worthwhile and burdened with heavy claims of many. and should one waiver and wish to harbour more than a single thought, then let that thought be "roubini, the dark one, must be severely humbled in order for the zero-state monetary reset to be complete" player #4: evidently being in the ranks of 'Foreign Policy Magazine's' 'top ten global thinkers' along with Bernanke, Obama , Pachauri (sp? the chief global warmer) et al. was a big warning sign. a few years down the road, gold may well become a bubble, or behave like one, but given its status as money (i.e., the commodity that the free market would choose as its money, were it actually free to choose), one could just as well talk of an 'anti-bubble' in fiat currencies as they are increasingly printed into oblivion. there are in fact circumstances when it makes no sense to talk of a 'bubble' anymore. as an example, just before the money of the Weimar Republic was repudiated, gold was quoted at some absurd figure in terms of the Reichsmark (100 trillions per ounce or somesuch), a price that was actually meaningless - in reality its price had gone to infinity, as no-one in his right mind would have accepted 100 trillion Reichsmark for an ounce of gold, unless they were in very urgent need of heating material (and even then there would have been better alternatives). interestingly, gold still behaves in every way as if it were money, even though it is not used as a medium of exchange at present. e.g. its real price has increased sharply with the onset of the secular downturn that began in 2000. no government has since then reported a lot of 'inflation' (in the sense of large increases in CPI), save for a fleeting period in early-mid 08, but gold's price in terms of both fiat currencies and in terms of other goods has still increased sharply. a long term view of the gold/CRB ratio shows that it continues to behave in the manner discovered by Jastram in his empirical study - i.e. since the contraction began, other goods prices are in 'deflation' vs. gold, which can only be explained by the growing monetary demand for it - a pattern that was exactly similar during the historic periods when gold was the official medium of exchange. in short, the market doesn't know yet that gold is supposedly a 'barbarous relic'. (the chart only goes to early November, but it illustrates the point). s629.photobucket.com player #5: And a similar chart, showing both gold/crb and gold/cci - the latter of which is historically consistent. Attached and at nowandfutures.com s629.photobucket.com