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“THERE IS A BUBBLE FORMING IN GOLD”

“THERE IS A BUBBLE FORMING IN GOLD”

Courtesy of The Pragmatic Capitalist 

Manpreet Gill, Asia strategist of Barclays Wealth says there is a bubble forming in gold prices and that investors should avoid the precious metal:

Source: CNBC

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Interesting comment section too, for example, and including Pragcap’s thoughts on the subject:

Angry MBA 08/08/2010 at 2:15 PM

The man is on drugs. If not then it’s a pathetic attempt to scare investors away from the real money.

Gold isn’t money. I don’t know how you folks come to believe such nonsense, but it obviously isn’t.

The math is very simple: If the markets believed that gold was a substitute for money and fractional reserve debt, gold would be worth far more than it is now. There is simply not enough gold in the world to support global economic growth, which makes it obvious that the markets don’t share your enthusiasm for gold or your paranoia about real money, i.e. the money that you don’t like.

Gold is a traded commodity that rises and falls in value, just like everything else. The retail dupes who fell for this gold-is-sacred nonsense after the late 70′s gold bubble ended up getting their clocks cleaned.

  • Close-up of feathers of a peacock Horizontal

    TPC 08/08/2010 at 3:28 PM

    MBA,

    That will ruffle some feathers. The irony with gold is that, if anything, we are moving further and further from any sort of commodity or even a paper based money. We are evolving to the point where money is just a thing. It is becoming plastic and will soon be electronic. It will not even be tangible in 500 years is my guess. The “gold is money” argument is sold by the Glenn Becks of the world (who have a vested interest in pushing the product – literally) and other people who don’t understand how monetary systems changed in 1971 and have not studied the history of money. Nonetheless, there is no reason to expect these misconceptions to change.

    Money is effectively an IOU. Who cares whether it comes in gold form or paper form or electronic form? All have their weaknesses and none have really proven to serve society better than another (except in terms of transportability in which case gold is the obvious loser).


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