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Archive for the ‘Gold Bubble’ Category

Bloom of Doom IV: Safe Assets and Sore Surprises

2010-02-02 2 comments

Many still think sovereign debt is safe (although I’d like to know how many “elder statesmen” still invest in these “assets” themselves today). This is astonishing at the best of times: would you give credit to a boy who still lived at home at the age of 200+ with no income of his own? Oh, of course, I see, you hope his Mum and Dad Taxpayer will foot the bill. So if he goes to the “Royal Casino” and buys chips, looses big time, then even scraps his old, but perfectly serviceable car to get a new one, you still give him more credit and more, and more?

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Do we see a gold bubble?

In times where within less than a generation humankind has seen several asset bubbles come and go (Japan’s real estate and stock market bubbles, the tiger states, the Dotcom bubble and now housing in the US, but equally e.g. in Spain and elsewhere plus one brewing in China and maybe one again in the US) and still left standing albeit on feet of clay,  the recent rallies in gold obviously beg the question if we not only see another bubble, this time in gold. The argument seems to rest on the assumption that any price change with a certain gradient above “what feels right” must be unjustified. Read more…

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