May 20, 2010
– Comments (2) |
RELATED TICKERS: GLD
My thoughts on this subject. I welcome all constructive, informed feedback.
If someone gave you $10,000 and two choices today on where to save or invest for 5 years.
Option A - Gold
Option B - 30 year U.S. treasuries
Which one would you choose and why?
Maybe TLT is fueling the bubble that will burst first.
i guess the bigger question to me (that seems to get confused a lot these days)
what is the difference between a bubble and a massive bull market?
I think the term Bubble is heavily heavily misued and vague one. It is often overapplied and often inaccurately applie.
I think there is a very very good chance Gold's run is not a bubble at all but rather the early midstages of a world wide generational cultural shift towards preferring Gold as a safety currency. Honestly I think the inflation/deflation question isn't the main driver of Gold rather just a general distrust of Fiat currency managed bu governments, any government. That's a distrust that I think people are going to remember/cling to for a long time and if this credit mess continues on for some time that could become a semi-permanent sentiment. Just as Great Depression caused a generation that was excessively thrifty here in the US.
I do think the ETFs complicate commodities quite a bit since they are almost certainly exaggerating volatility and speed quite a bit. I think the moves would still happen but ETFs are accelerating the moves by lowering the barriers to "investing" in commodities.
But I've been a Gold bull on and off since 2003 so perhaps I'm not the most unbiased opinion.