Wednesday, October 28, 2009
What Gold Bubble?
"Signs of gold fever are everywhere. ... But amid the buying frenzy after a decade-long run-up that has seen the price quadruple, is gold still a good investment? The simple answer: Wherever the price of gold is headed in the long term, several market watchers say the fundamentals indicate that gold is poised to fall. ... Jim Rogers, the investor who predicted the commodities boom earlier this decade, expects gold to pass its inflation-adjusted 1980 peak of $2,312. 'Gold is going to be much higher over the course of the bull market, in a decade or however long it lasts,' he says. ... But when you look at supply and demand, gold loses some of its luster. Gold miners have poured more than $40 billion into new projects since the bull market began in 2001, according to Montreal-based bullion dealer Kitco. ... On top of that, $1,000 gold brings out gold scrap sellers", Scott Cendrowski (SC) at Fortune, 26 October 2009.
Buying frenzy? For every one ounce gold coin sold, one is bought. What is SC talking about? Fundamentals? What is SC talking about? Supply and demand? Gold is not corn. SC, you are a fool. $40 billion? So what? Compare $40 billion to? At $1,048 gold looks cheap to me.