Posted on 10/25/2010 7:43:44 AM PDT by SeekAndFind
I first wrote about gold in early July at WSJ.com. I took a lot of heat then but the jury is still out.
In fact, since July 9, stocks and gold have performed almost exactly the same.
But with stocks trading at record low multiples over earnings (versus bond yields) and with gold at an all time high I can think of 11 straightforward reasons why the Gold Bubble is going to burst and stocks are the primary place one should put their money.
* It has very few industrial uses.
* Gold has no dividend yield.
* Gold has no earnings yield.
* The US should start selling its gold to pay down its debt.
* Interest rates are at zero and the Fed is printing money.
* John Paulson and George Soros can't carry the market forever.
* Gold production is rising.
* Gold sentiment is at an all-time bullish high
* Assets in the GLD ETF, the ETF which tracks gold, are also reaching a level usually associated with a top
* The Oracle is a huge gold bear (That's Warren Buffet)
(Excerpt) Read more at businessinsider.com ...
My gut tells me that gold might be in a bubble at $4000, and settle down to $2500 (rising adjusted for any continued inflation).
I guess when times get hard what has more *real* value - 100 oz of silver or a 45 ACP and 50 rounds of ammo?
The silver helps your spare wealth survive the hard times.
I think this is the first thread ever where the original author wins the gold-bug bingo!
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