Nine Year Old Figures Out Qe, Why Can't Bernanke?

Gold has been used as money for 6000 years, way before greenbacks.

I believe the Gold spike has been due to excess liquidity (i.e. investors have too much money and not enough places to put it).

Loose money is politically more pallatable than tight money. Very few (in power) have the guts to tighten things up. So as much as I feel Gold is in bubble territory, I'm afraid the bubble probably won't burst until short-term interest rates go up.

As coin collectors, it's a great time to buy tougher-date gold and silver coins at (close to) melt value, with some assurance that there is a numismatic floor to their value. (Well... a can of worms: I think coins are overpriced too, but their demise may be more of a slow train wreck than a bursting bubble. Is there any way today's kids will be tomorrow's collectors? I doubt it.)

There may be a lot of historical evidence on what gold and silver bought LONG before 1974.

And anyone who trusts that the government is giving you HONEST inflation numbers needs a reality check. Same goes for unemployment numbers, etc...

If you want the truth, go shopping.

Ron, the reality is you can't go into a Wal-mart and spend Gold. They only take dollars. Hence, if you want to buy anything at a major retailer with Gold you must first find a broker willing to exchange it for dollars. The rate one gets is arbitrary and determined by a market quotation. The market quotation was $400 ten years ago. Now it is $1800. Caveat Emptor for anyone who wants to buy at these rates. You are kidding yourself if you think, by doing so, you are preserving your buying power. By contrast, you are simply buying into a bubble just like NASDAQ investors did in the 1990's ("tech stocks can never go down"... right...) or home buyers did in the mid-2000's ("all my savings are in my house","home values always go up","they aren't making any more land" ... right ...)

I don't see gold as a bubble what's so ever. The reason we use dollars is cause we go off of a keynesian style economy which can be debated that it doesn't work. You can also make a very strong case for the dollar going back to a gold standard. The fed has a monopoly over our money if we had a true free market consumers could choose which form of 'money' they see has greater purchasing power. I think if it was left up to the people we would ditch the dollar and go back to gold and silver cause that's what sound money is. Fenton, it also states in the constitution that states shall only issue gold and silver has legal tender so even our founding fathers knew of the dangers of paper money. The only reason we have the dollar is cause the U.S. goes off of a keynesian style economy like I stated cause if the government has a form of money they can print out of thin air then there's no stopping the size the government can reach. If we were to go back to a gold standard washington would actually have to balance their budgets hence shrink the size of government which they don't want.

They you should have the courage of your convictions and be shorting gold hand over fist. After all, according to your thesis, you WILL make a ton of money that way.



Yeah, I keep hearing this all the time too. Fact is, you can't spend Australian dollars, Canadian dollars, or Swiss Francs at US Wal*Mart stores either but that does not make them "not money". They ARE money. Just not the kind that Wal*Mart accepts in the US.



Gold clearly is not in a bubble. We don't see people buying gold today so they can flip it tomorrow and double their money ala the over-heated housing market in 2005-7. What we have today is a GOVERNMENT bubble. Yes, that's right, folks, we have FAR too much government and we simply can't pay for all of it. It is the 8,000 lb. elephant in the room and Pachy definitely needs to go on a diet.



So, how do you feel about Apple Inc. stock? It's gone from under $8 a share in Sept. 2001 to $384 a share today. That's a 48x multiplier while gold was multiplying by 7x. Is Apple a bubble too?



Amen to that, Bro. The numbers that the Fed and the government are handing out are clearly bogus. They are counting on the illiterati out there not to be able to figure this out. Well, tough luck for them. Some of us were educated in spite of the US Dept. of Education's best efforts.



Unless the US government has a MAJOR epiphany, today's kids will be more likely to be struggling to survive rather than collecting coins in the future.



Well, his first words would likely address the complete collapse of the USSR.



Or that we simply value dollars less than before.

Yes -- that's more or less equivalent to my statement that gold's run-up is due to excess liquidity.