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AdLib On January - 8 - 2010

It really isn’t hard to spot an economic “bubble”, all you have to do is ask yourself, “Where are all the voices of ‘common sense’ telling me is the one place to put my money?”

Well, if you won’t take my word for it that gold is the new bubble, you must be taking Glenn Beck’s, Sean Hannity’s and Bill O’Reilly’s word that the best and most secure investment that can only make you richer is gold.

I don’t know about you but I knew the housing bubble was a bubble, I knew the dot com bubble was a bubble, I even recognized the Tulip bubble way back when.

There is a natural ebb and flow to investments, in which legit investments earn profits or lose value.

They don’t go up 50% a year…unless they are sitting on top of a bubble.

So, there may be a silver lining to all of this, if all the right wingers are following their leaders’ advice and investing in gold, when a rush to sell gold wipes out their investments, that’s less money for Palin 2012.

Categories: Featured, The Economy

Written by AdLib

My motto is, "It is better to have blogged and lost hours of your day, than never to have blogged at all."

48 Responses so far.

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  1. escribacat says:

    Google must be a bubble.

  2. Emerald1943 says:

    Hi everyone!

    This is just plain ol’ funny to me! I started my little gem and jewelry business about 20 years ago, a part-time week-ends only gig at first. When my life situation would allow it, I went full time and opened a really neat little shop, including a “gem mine” where you pan for rough gemstones and you may opt for us to cut them into faceted stones. We offer 14K and sterling settings of all kinds.

    I have watched the gold market more than most since it affects my bottom line. When I first started out, gold was about $500 per ounce. It went down for a while and we even saw a low of around $325/oz. for a time. About two years ago, it began to climb and now is fluctuating around $1,100 per ounce! Quite an increase!

    My question about this whole thing is, “Why would anybody buy it when it is at record highs?” The time to buy would have been two to three years ago, which I did, buying as much inventory for my shop as possible. We have had to re-price our gold inventory to reflect the increased cost several times.

    My point here is that there is no guarantee that gold will go any higher in value than it is right now. More than likely, as the economy improves in this country, gold will go down in value…and all the Beck-o-bots who have bought it at this inflated price are going to lose their shirts!

    • darwind says:

      I’m Canadian and I have been investing in gold for years and I must say you folks just don’t get it. India’s banks recently bought 200 tons gold from the IMF and China and most of the worlds banks are diversifying into the gold and silver. Why? Insurance against fiat money printing systems. Gold and to a lesser extent silver has always been considered money. The US dollar will have ups and downs but for the most part continue to fall for many many years to come and so Gold will continue to rise. I only buy gold on the dips. It’s that simple. Gold has been on a steady even rise for over 10 years, so I’d hardly call that a bubble. Only when it finally reached 1000 did people sit up and take notice. IMO it’s a good idea to hold at least 15% of your net worth in precious metals to preserve your wealth and for insurance against a fall out of the dollar. Let’s put it this way. In order for the US to balance it’s budget they need to raise taxes by 50% over the next 10 years or destroy the dollar by 50% and there by reduce the debt. What do you think will happen? I’ve never seen a politician get elected on a 50% tax increase. 1000 is the new 0 for gold.

      • KQuark says:

        Welcome. Honest question where do you keep it?

      • PepeLepew says:

        A Canadian! ๐Ÿ˜€

      • AdLib says:

        Good points, darwind and welcome to The Planet!

        The real question though is whether the currency values around the world rise as the economy recovers. That would lead to a reduction in investment in gold.

        Then the question is, what would one or two big quarters of economic growth do to the value of gold and would it create a domino effect that sends gold plummeting?

        Historically, I think we’ve seen this repeatedly. The same 10 year growth you refer to was the case for the housing market too.

        Gold is over valued now because of the very reasons you explain. It is seen as the only secure investment and so much has been invested in it.

        I remember people saying the same thing about the stock market, that 10,000 was the new 0 and that it would rise to 25,000 during Bush’s term.

        The lesson is, don’t count your golden eggs before they hatch.

    • jan4insight says:

      “all the Beck-o-bots who have bought it at this inflated price are going to lose their shirts!”
      Other than the visual image, what a lovely thought!

    • bitohistory says:

      Isn’t that how one gets rich? Buy high-sell low? Or is that just derivatives and AIG makes up the difference?

    • javaz says:

      Hi Emerald!
      Informative post and what an interesting business you have selling gems and jewelry.

  3. SueInCa says:

    Actually, I was thinking this same thing yesterday. Not sure it is a government controlled bubble, but a bubble nonetheless. And none of these sheeple take in to account that if there is a cataclysmic event and the dollar is destroyed, gold won’t have much value either? Even if you were able to sell it back, I would think you would do so at a loss, but I am not the smartest when it comes to these types of commodies. This is another gimic to drive up the wealth of a certain sector of our country, charlatans same as the banking industry.

    • BigDogMom says:

      Sue, this gold that these poor people are buying are in the form of gold coins, which will probably have 1/3 the value of gold in the form of ingots or gold bullion, when it comes to market value and when they go to sell it.

      When gold in made into coins in falls in to the category such as antiques, artwork, stamps and other collectibles…and there is a limited market/buyers/collectors that would purchase such items…what is hot today, may not be hot tomorrow….unless it’s one of the masters such as a Van Gogh.

      You are right in saying that these gold companies are charlatans, the only person that is going to make money on this is the company selling the gold and their spokespeople, ie., Glen Beck et al.


      • KQuark says:

        Good point it’s a suckers bet that way too. Gold is not really sold by the once that way most people think. The gold you can buy by the once is actually not in your possession physically. It’s sold as paper shares that are supposed to be backed by gold bullion.

  4. PatsyT says:

    Try as they may, those Beckerheads will never be Clint Eastwood and Lee Marvin… GOLD !

  5. Chernynkaya says:

    Whenever I hear about people scurrying to buy gold, I figure they are the same as survivalists-- betting that the world is heading towards cataclysm. It’s kind of fascinating, actually. What triggers that fear (wish?) in people? The current impulse to get gold, IMO, is the election of the first AA President. People freaked out at that--OH Noes!-- a black Prez and America is over. The same with the Mayan 2012 hysteria. There are also those, regardless of which party or president is in power, who are always expecting the sky to fall, though.

    What gets me is that even if the world turned into “Beyond Thunderdome” tomorrow, what good would gold do? Me, I’m investing in water! ๐Ÿ˜‰

  6. BigDogMom says:

    It’s really says something sad about some of the people in our country actually believe these snake oil salesman on TV. But like P.T. Barnum said, “There’s a sucker born every minute.”

    Waiting for the day that Mr. Beck is knocked off his pedestal when this bubble breaks…

  7. dgraz says:

    I agree with you about gold being a bubble.
    If you want to read the best book on investing, read “The Intelligent Investor” by Benjamin Graham.
    The book was recommended by Warren Buffet and it defines investing compared to speculation.

  8. KQuark says:

    It more plays into the fear of their base because we have the first socialist president than being a sound investment strategy. Any canny investor knows you have an investment portfolio and putting your money in all one thing is stupid. The funniest part of their hypocrisy is at least in the short term the stock market has been the best investment when all these same right wingers were telling us back in February that the stock market was a terrible investment.

    Let me go one step further and take a jab at “populist conservative” teabaggers once again. You know the conservatives that want to dismantle the Fed and make currency “hard” again by backing it up with a commodity. Now that is a brilliant fucking who’s gong to put the bell on the cat idea. Which commodity, oil, gold, uranium, Oxycontin pills, Adlib posts, etc? Basing currency on a commodity will just make that commodity overpriced and create more reasons for countries to go to war to get that limited resource. Before people get on me the Fed system does need to be reformed but a commodity backed currency is not the answer.

    BTW I just saw a Newsmax commercial with purchase of a subscription you can get Palin’s book for $4.95. Let’s set Palin’s book as the commodity to set the money standard on, that’s the ticket.

  9. Tiger99 says:

    I scoof at the “Gold” will save you in economic collapse theroy…

    Thats why I hoard Cocoa, Sugar, Salt, Coffee, Tampoons and Toilet Paper… ๐Ÿ˜ˆ

  10. bitohistory says:

    Read an article with charts on the history of the price of gold over the last 50-60 years. It has never been a great deal for long term investment. Barley has kept up with inflation. Had a good friend (a trust fund baby) who lost his arse in the sivler market when the Hunt boys tried to corner the market!
    Tulips are in a bubble? Oh, sh**! :-)

  11. kesmarn says:

    You must have been a mere lad during the Tulip Bubble AdLib! And you certainly have aged well.

    I’ve had the same (heh-heh-heh) thought about Beck and all the Beckazoids out there who are buying gold at $1000/ounce and hoarding it. Wait till THIS bubble bursts! King Midas Beck will have something real to cry about then; no need for vaseline under his eyes.

    I say: Let ’em eat gold! Kind soul that I am… ๐Ÿ˜ฎ

    • bitohistory says:

      k’es, I would rather they ate diamonds. ๐Ÿ˜›

      • kesmarn says:

        I understand they are chock full o’ valuable fiber, b’ito. And I have to say, I might actually volunteer to empty bedpans on the Rich Guys Unit in the hospital. Pannin’ fer jools, pardner!

        • bitohistory says:

          k’es, “Pannin

          • kesmarn says:

            But think of it, b’ito. If these guys are ingesting diamonds, it would be my opportunity to get into a lucrative business starting at the “bottom,” so to speak.

            • bitohistory says:

              k’es, I hope you don’t work on a post-op floor! I can see the patient with stomach surgery yelling “Stop making me laugh!! OWWW! Morphine! ”

            • kesmarn says:

              Actually, now that you mention it, b’ito, I have to say that I do get a lot of post-ops. But I make sure I give them the morphine BEFORE I joke with them. It would be cruel not to, considering my jokes.

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