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Yup.
I'm an old fart and I've seen it before. I knew someone who jumped on the gold bandwagon back in the late 1970's and was REALLY burned when gold prices collapsed suddenly. He ended up putting a bullet in his head (not purely because of his huge financial setback, but partially so). Gold is one of those bubble items that can drop very very quickly. Right now it's on an uptick - but it won't stay that way. I don't know WHEN it will collapse, but it WILL collapse - that's the nature of such bubbles. Over the long run gold has historically not been a very good investment.
Ken
That's because gold is money and liquidity and NOT an investment. Keep talking down gold and giving people horror stories about how people kill themselves partly over the bubble. People have lost FAR more in real estate than gold.
If gold is a bad investment then why are China and India trading U S fiat currency for all the gold they can get their hands on?It is not just the China central bank their people are buying huge amounts.
The way I look at it they will continue that trend and gold is going to soar,if you were them,would you rather have a physical asset that has value or would you rather buy worthless U S treasury bonds backed by a fiat currency?
If gold is a bad investment then why are China and India trading U S fiat currency for all the gold they can get their hands on?
China (in particular) and India have been buying BOTH (look at how their stockpiles of US treasuries have grown over the past year). The argument that these countries are dumping US dollars for gold is pure BS. The fact is these countries have money flowing into them because of their positive balance of trade and they are simply buying ALL KINDS of investments - including US dollars AND gold and trying to diversify. One month their holdings in US dollars are up a bit, the next month they are down a bit - but the overall trend for the past year has been a massive increase in US treasuries.
In regards to the recent purchases of gold (in particular) by India - my personal opinion is that the folks there making that decision are simply caught up in the same current "gold fever" as everyone else. That's doesn't necessarily make it a wise choice in the long run.
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