Posted on 11/23/2009 6:24:17 AM PST by SeekAndFind
There has been an endless amount of chatter about the price of gold being too high (it's not) and perhaps representing a bubble. It also seems that fair amounts of ink and windage have been wasted on worries about the gold trade being "too crowded."
In my daily column on my own Web site, on Sept. 17, I noted a remark by Dennis Gartman of The Gartman Letter that the gold market was "terribly, egregiously, preposterously, shockingly overpopulated."
That day, gold closed at $1,014 an ounce. Here we are, about two months later, and gold is more than 10% higher.
In a bull market, worrying about an idea being too crowded with like-minded investors is not very productive. More likely than not, it will help to eliminate you from a winning position.
At some point, when the gold market is finally reaching a top, it will, in fact, be too crowded. But we're almost nine years into this bull market in gold, and to me it seems that there are more people of the mind that "the trade" is too crowded than there are who say it isn't.
We'll know gold is overcrowded when . . . For the long-gold trade to really become too crowded, certain events will need to occur:
* Goldman Sachs (GS, news, msgs) will have had "bus tours" to a bunch of mines, like the tours it and other companies have arranged for different industries, particularly technology.
* The public will have to be involved in a major way, and we'll see ads on Bubblevision encouraging people to buy gold instead of prodding them to sell their jewelry, as is the case these days.
(Excerpt) Read more at articles.moneycentral.msn.com ...
If we went back on the gold standard and had to cover all the money printed so far, gold would be over 7,600 an Oz.
We have a way to go.
Sure, the government will always find a way to get all the people’s gold back. Just ask those who were in Germany before WWII. The government called in all peoples gold and made it illegal for them to own it. Any gold being sold now is being registered so they know where to go to get it. The government will state that IT requires the Gold to run the country. My german friends, won’t touch it because they saw what happened with it in Germany during such times as this world is entering now. CO
The question isn’t how much gold will rise; it’s how much the dollar will sink. Is gold volatile or is it the dollar? Which has its value determined by legislative fiat?
Perhaps gold is essentially staying the same and only appears to be rising much like a mountain in a draining lake.
Some German refugees who came out to Australia, in the inter-war era, did have gold. Often, it was all they had, to start up again elsewhere. The currency had collapsed, it was worthless.
You betcha. My Great Grandma came to America from Germany with a lot of gold coins sewn into the hem of her skirt and her coat.
I’m following your lead, Grandma Emma! ;)
I guess it was timing and the place. My friends did not fare so well. My friend, Bettina was the daughter of a surgeon and they lost - EVERYTHING!! CO
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