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Gold makes a new all time high today

By iwog   Follow   Tue, 14 Sep 2010, 11:04am   8,520 views   146 comments
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$1275 before dropping back to $1270ish. Silver is getting very close to its all time high as well.

In honor of the occasion I'm linking a Patrick thread from June 2006 where is was proposed that a gold price of $675 might be a bubble. ;)

http://patrick.net/forum/?p=222

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1. iwog Follow Befriend (48) 274 threads 12,582 comments 47 male Lafayette, CA Premium

   1   11:24am Tue 14 Sep 2010   Share   Quote   Permalink   Like   Dislike   pkowen says Might be a good time to sell? Not for me. I still believe gold will form a bubble top and exceed $2000. I'll sell at that point.

2. pkowen Follow Befriend 30 threads 555 comments San Carlos, CA

   2   11:25am Tue 14 Sep 2010   Share   Quote   Permalink   Like   Dislike   iwog says pkowen says Might be a good time to sell? Not for me. I still believe gold will form a bubble top and exceed $2000. I’ll sell at that point. Duly noted. I am out of gold right now and don't think I'll jump in at this point. I miss the ride up on a lot of bubbles.

3. theoakman Follow Befriend 2 threads 645 comments

   3   4:13pm Tue 14 Sep 2010   Share   Quote   Permalink   Like   Dislike   It really paid to go all in during that $700 phase circa 2008. I recall constantly getting ridiculed on patrick.net for buying gold at $720 - $800 and Silver at $10 - $14. Beyond that...some of those miners that posted 500% weren't bad either. It's going to be fun watching everyone else pile into gold while I sell.

4. E-man Follow Befriend (31) 34 threads 2,554 comments San Jose, CA Premium

   4   4:25pm Tue 14 Sep 2010   Share   Quote   Permalink   Like   Dislike (1)   Are you considering buying March 2011 option now? A $5k bet might make enough $$ to buy another home in Concord should we go parabolic :o)

5. iwog Follow Befriend (48) 274 threads 12,582 comments 47 male Lafayette, CA Premium

   5   4:37pm Tue 14 Sep 2010   Share   Quote   Permalink   Like   Dislike   E-man says Are you considering buying March 2011 option now? A $5k bet might make enough $$ to buy another home in Concord should we go parabolic :o) I gotta see a nice bear trap before I gamble again. For now I'm just happy with my safe deposit box stash and some GLD shares. I THOUGHT the bear trap was December 2008, but we never got the parabolic follow through. All we got is another boring 20% gain year. My bubble-dogma says the peak is 18 months after the bottom of the bear trap. It didn't happen in 2010 so either bubble-dogma is bullcrap, the 18 month rule might just as easily be 24 or 30 months, (violating all the bubbles I studied) OR there's a correction coming followed by people freaking out over inflation and finally taking gold parabolic. As before, DOWN is not part of my vocabulary so I'm in for the ride wherever it goes.

6. iwog Follow Befriend (48) 274 threads 12,582 comments 47 male Lafayette, CA Premium

   6   4:39pm Tue 14 Sep 2010   Share   Quote   Permalink   Like   Dislike   E-man says Are you considering buying March 2011 option now? A $5k bet might make enough $$ to buy another home in Concord should we go parabolic :o) If gold corrects to $1000, I'll gamble again on 2 year contracts. If a correction doesn't come, but gold starts to go parabolic anyway, I'll wait til $2000 and short the backside.

7. errc Follow Befriend (7) 30 threads 1,222 comments 31 male Premium

   7   4:45pm Tue 14 Sep 2010   Share   Quote   Permalink   Like   Dislike   What scenario could you drum up where gold slides down to 1000? That doesn't even sound possible

8. iwog Follow Befriend (48) 274 threads 12,582 comments 47 male Lafayette, CA Premium

   8   4:54pm Tue 14 Sep 2010   Share   Quote   Permalink   Like   Dislike   errc says What scenario could you drum up where gold slides down to 1000? That doesn’t even sound possible Nothing more than a technical correction. Oil had a big one in the middle of 2006 when it slid from $75 to $50 over 6 months during a relatively hot economy. It then went parabolic in 2007 and hit the peak almost exactly 18 months after the bear trap. For gold, I THOUGHT this was in 2008 when gold touched $1000 then fell rapidly to the low $700s. My big bet this year was for a parabolic spring and a peak around June. It didn't happen, but it didn't go down either. It just kept a steady bull market run. So maybe the trigger point for a selloff will be $1500, a crash to $1000, then $2000 by 2012. It's all just speculation, but there's no doubt that gold is being accumulated. I'm still waiting for the waitress and the cab drive to tell me how many coins they have.

9. E-man Follow Befriend (31) 34 threads 2,554 comments San Jose, CA Premium

   9   4:58pm Tue 14 Sep 2010   Share   Quote   Permalink   Like   Dislike   iwog says I’m still waiting for the waitress and the cab drive to tell me how many coins they have. LOL. That's right. Or the cashier at Safeway or Starbucks.

10. Armando148 Follow Befriend 2 threads 52 comments

    10   5:05pm Tue 14 Sep 2010   Share   Quote   Permalink   Like   Dislike   Good time to sell if you bought low. Or at least sell enough to get back your original investment adjusted for inflation. If gold crashed it wouldn't hurt as much given you got your original investment back. If it doesn't than you can laugh all the way to bank, either way you win!

11. EBGuy Follow Befriend 4 threads 2,099 comments

    11   5:12pm Tue 14 Sep 2010   Share   Quote   Permalink   Like   Dislike   I'd love to have another post from OO, who used to post on the old school threads. He was hardcore: Perth Mint certificates in $100k increments. Sigh, I got stopped out of my GLD and AU sub $900...

12. theoakman Follow Befriend 2 threads 645 comments

    12   6:30pm Tue 14 Sep 2010   Share   Quote   Permalink   Like   Dislike   Armando148 says Good time to sell if you bought low. Or at least sell enough to get back your original investment adjusted for inflation. If gold crashed it wouldn’t hurt as much given you got your original investment back. If it doesn’t than you can laugh all the way to bank, either way you win! This is an awful time to sell. Gold is on the cusp of going parabolic and the dollar is poised to drop off the side of the cliff the second interest rates rise.

13. B.A.C.A.H. Follow Befriend (6) 5 threads 2,359 comments

    13   8:26pm Tue 14 Sep 2010   Share   Quote   Permalink   Like   Dislike   guys, what do you suppose could happen if gold "parabolic?"? Maybe, it will become impractical to sell the physical bullion if this were to happen. Someone I know inquired about selling a gold bar, the buyer said he'd have to get an assay from someone that the buyer approved of, and he'd have to pay for the assay. If it comes to that, it may be difficult to avoid a 1099 form or some such. I am not opposed to using gold as a money substitute, maybe I have even done so myself, and if I did, I would think about the different possibilities of "golden handcuffs".

14. Nomograph Follow Befriend (1) 104 threads 2,851 comments

    14   8:36pm Tue 14 Sep 2010   Share   Quote   Permalink   Like   Dislike   Sweet. Follow the old thread Iwog linked down to a comment by Randy H: Randy H says I tend to disagree with pure economic std of living measures (gdp per capita) as it doesn’t capture the value of life well. Nazi Germany had a great GDP per capita; I wouldn’t say it was a great standard of living. It's good to know that the nutjobs were comparing everything to Nazi Germany in 2006 too.

15. Nomograph Follow Befriend (1) 104 threads 2,851 comments

    15   8:37pm Tue 14 Sep 2010   Share   Quote   Permalink   Like (1)   Dislike (1)   theoakman says This is an awful time to sell. Gold is on the cusp of going parabolic and the dollar is poised to drop off the side of the cliff the second interest rates rise. The goldbug's fatal flaw: they can never bring themselves to do a little profit-taking

16. robertoaribas Follow Befriend (23) 55 threads 3,836 comments Scottsdale, AZ robertoaribas's website

    16   10:06pm Tue 14 Sep 2010   Share   Quote   Permalink   Like (1)   Dislike   I might have to pull my grilz out and sell them!

17. theoakman Follow Befriend 2 threads 645 comments

    17   1:45pm Wed 15 Sep 2010   Share   Quote   Permalink   Like   Dislike   Nomograph says theoakman says This is an awful time to sell. Gold is on the cusp of going parabolic and the dollar is poised to drop off the side of the cliff the second interest rates rise. The goldbug’s fatal flaw: they can never bring themselves to do a little profit-taking Maybe you missed the part above where I said how fun it's going to be to sell it to all the suckers who will be the last ones in the door. Once Gold goes parabolic, I'll start selling. This has been a healthy bull run with plenty of pullbacks to prevent it from getting out of hand so far. I don't really need to do any profit taking. I quintupled my net wealth in the past 3 years. Gold would have to fall down to about $200 an oz and someone would have to liquidate my bank account to get me back to square one.

18. marcus Follow Befriend (5) 168 threads 5,109 comments

    18   10:56am Sun 19 Sep 2010   Share   Quote   Permalink   Like   Dislike   theoakman says dollar is poised to drop off the side of the cliff the second interest rates rise Sounds backwards to me. If there is a causal relationship there, it is the dollar falling off the cliff might cause interest rates to go up.

19. Cvoc13 Follow Befriend (9) 6 threads 194 comments Dublin, CA Cvoc13's website

    19   11:11am Sun 19 Sep 2010   Share   Quote   Permalink   Like   Dislike (1)   Listened to Bloomberg Podcast last night (Fridays podcast) and inflation adjusted, 1980 is the high, and to match that it (Gold) would need to go up 97% from here to about 2430 (if I recall the numbers correctly, I know I am close)

20. B.A.C.A.H. Follow Befriend (6) 5 threads 2,359 comments

    20   12:14pm Sun 19 Sep 2010   Share   Quote   Permalink   Like   Dislike   I was looking up median wages on the St Louis fed website. When the US went off gold, a median American would have to trade about 10 hrs of labor for an ounce of gold. At $1200 in 1980, it'd have been about 170 hrs of median labor. At $1300 in 2010 it'd be about 68 hrs of median labor. However, I think that since we went off gold in 1971, the purchasing power of Americans' wages has declined by between about one to 1.5 % per year, disguised by gradual increase from the early 1970's to the late 1980's by sending a second wage earner to the labor force to maintain the same household spending, and later by borrowing gimmickery. So, correcting for a decline in our standard of living, 10 hours of a 1971-American is probably worth about 17.6 hrs of a 2010-American, and 170 hrs of a 1980-American is probably worth about 262 hrs of a 2010-American. It means that if you believe our standard of living has not declined, the American wage priced gold is at about one-third of the 1980 bubble. If you believe that our standard of living has been declining since 1971 at a rate of about 1.45% per year, the American wage priced gold is at about between a fourth to third of the 1980 bubble.

21. marcus Follow Befriend (5) 168 threads 5,109 comments

    21   1:26pm Sun 19 Sep 2010   Share   Quote   Permalink   Like   Dislike   Interesting, and good points. The 1980 bubble was near the peak of inflation expectations. Obviously we are nowhere near that now. And yet gold seems to be discounting some significant future inflation, given that gold has more than quadrupled in the last 8 years or so. And yet the long term securities market (bonds) reflect long term interest rates near lows for the last 50 years. Which one is wrong ? Gold or bonds ? Who knows, but maybe part of the explanation for gold's strength is simply the amount of capital there is that needs to be parked somewhere, and t is essentially a hedge for the huge amount of capital invested in bonds (and bond like investments), and to a lesser extent other dollar denominated investments.

22. B.A.C.A.H. Follow Befriend (6) 5 threads 2,359 comments

    22   10:18pm Sun 19 Sep 2010   Share   Quote   Permalink   Like   Dislike   Time to take profit from your gold buillon while you can: (from http://cpagroup.wordpress.com/2010/04/07/prepare-for-new-1099-misc-requirements-in-2012/ ): The passage of the Healthcare reform bill included some of the most drastic changes to 1099 information reporting in over a decade. The bill included revenue raising provisions meant to seek greater compliance of the tax code via 1099 information reporting. General provisions included: The elimination of the corporate exemption from 1099-MISC reporting. (Public Law 111-148) The requirement to report payments for property (goods, materials, merchandise, supplies, etc.). (Public Law 111-148) A six-fold increase in penalties from $250,000 to 1.5 million. (H.R.4213, H.R.4849) A doubling of penalties per record from $50 to $100. (H.R.4213, H.R.4849) Beginning for payments made after December 31, 2011, companies will be required to furnish and file form 1099-MISC for payments made to all for-profit companies regardless of corporate status. In addition all payments for goods, materials, merchandise, supplies, and other property will need to be reported as well. Early indications reveal that these changes will likely cause the 1099 reporting volume to increase significantly for most companies as well as the associated B-Notices.

23. zzyzzx Follow Befriend (9) 416 threads 4,138 comments Baltimore, MD

    23   8:55am Mon 20 Sep 2010   Share   Quote   Permalink   Like   Dislike   I also think that gold has a long way up to go. However, I have no idea when to sell. I bought at ~$450/oz

24. iwog Follow Befriend (48) 274 threads 12,582 comments 47 male Lafayette, CA Premium

    24   11:12am Mon 20 Sep 2010   Share   Quote   Permalink   Like (1)   Dislike (1)   All that productivity is going into someone's pocket, it's just not going to the average worker.

25. theoakman Follow Befriend 2 threads 645 comments

    25   2:23pm Mon 20 Sep 2010   Share   Quote   Permalink   Like   Dislike   marcus says oak marcus says theoakman says dollar is poised to drop off the side of the cliff the second interest rates rise Sounds backwards to me. If there is a causal relationship there, it is the dollar falling off the cliff might cause interest rates to go up. No, it doesn't matter which one happens first. If interest rates rise and the debt keeps growing, at some point, they result to all out printing to service the debt. They stand no chance of legitimately paying it off through taxation.

26. thomas.wong1986 Follow Befriend 16 threads 4,426 comments

    26   4:37pm Mon 20 Sep 2010   Share   Quote   Permalink   Like   Dislike (1)   iwog says All that productivity is going into someone’s pocket, it’s just not going to the average worker. Productivity keeps you from being overrun by the competition. Its not a monetary gain going into someones pocket. At the end of the day, you have a job, and thats what counts.

27. marcus Follow Befriend (5) 168 threads 5,109 comments

    27   5:05pm Mon 20 Sep 2010   Share   Quote   Permalink   Like   Dislike   theoakman says If interest rates rise and the debt keeps growing, at some point, they result to all out printing to service the debt. They stand no chance of legitimately paying it off through taxation. I disagree. It's possible but... All else being equal, interest rates going up causes the dollar to go up against other currencies. It's simple. Say you're money is in Euros and all the short term rates in Europe (and the US) are 2% and suddenly the rates in the US go up to 4%. Dollars suddenly got more desirable than Euros, dollar relative to the Euro goes up in price. This isn't some sort of speculation, it is the way it has always worked. It's true that it doesn't have to work this way (that's why I said all else being equal). For example if interest rates go up because the dollar is crashing ( the fed is trying to stop the crash with higher rates ) and the perception is that the dollar will continue to crash, then I could see the dollar dropping in spite of the higher interest rates. But that would be unusual. The question of whether we can get our act together, and start basically living within our means, that is the question of whether we can pay off our debt is a longer term question. And even if "at some point" inflation is a part of how we deal with it, that is different than what you originally said: the second interest rates rise But then again, everything is different than ever before this time, so who knows.

28. tatupu70 Follow Befriend (3) 15 threads 5,653 comments

    28   5:59pm Mon 20 Sep 2010   Share   Quote   Permalink   Like   Dislike   thomas.wong1986 says Its not a monetary gain going into someones pocket. Uh--yes it is.

29. pkowen Follow Befriend 30 threads 555 comments San Carlos, CA

    29   8:55pm Mon 20 Sep 2010   Share   Quote   Permalink   Like   Dislike   Might be a good time to sell?

30. BobbyS Follow Befriend 16 threads 121 comments

    30   1:10am Tue 21 Sep 2010   Share   Quote   Permalink   Like   Dislike   WHo knows what will happen. You can find numerous evidence for a rise or drop of gold prices. I myself have a very low tolerance for risk and would stay clear of gambling with gold.

31. B.A.C.A.H. Follow Befriend (6) 5 threads 2,359 comments

    31   9:23am Tue 21 Sep 2010   Share   Quote   Permalink   Like   Dislike   BobbyS, "gambling" with gold would be like speculating on the price, in whatever units you choose, (USD, Euro, "shares of Dow index", etc). Using it to hedge would be likely because of a very low tolerance for risk. You can argue if it is a good hedge or not, but using it for a hedge is not gambling. Probably not a good hedge if the cost basis is today's price. Certainly has been a great hedge for the USD up till now for folks who "un-gambled" by hedging in it earlier in the decade.

32. theoakman Follow Befriend 2 threads 645 comments

    32   1:27pm Tue 21 Sep 2010   Share   Quote   Permalink   Like (1)   Dislike   BobbyS says WHo knows what will happen. You can find numerous evidence for a rise or drop of gold prices. I myself have a very low tolerance for risk and would stay clear of gambling with gold. A lot of the financial communities definition of low risk is USTbills earning 2%. If you asked me, they are the riskiest assets that exist today outside of Japanese Bonds earning 0%.

33. Nomograph Follow Befriend (1) 104 threads 2,851 comments

    33   1:42pm Tue 21 Sep 2010   Share   Quote   Permalink   Like (2)   Dislike   theoakman says Maybe you missed the part above where I said how fun it’s going to be to sell it to all the suckers who will be the last ones in the door. Once Gold goes parabolic, I’ll start selling. You won't know when gold goes parabolic until after it happens. How do you know we aren't sitting at the top of an inverted parabola? You don't. An good investor would dollar-profit-average as a hedge. A gambler would try to time the market. Don't try to make suckers out of people until you've assured it won't be you, Theo.

34. Nomograph Follow Befriend (1) 104 threads 2,851 comments

    34   1:47pm Tue 21 Sep 2010   Share   Quote   Permalink   Like   Dislike   theoakman says Once Gold goes parabolic, I’ll start selling. This has been a healthy bull run with plenty of pullbacks to prevent it from getting out of hand so far. I don’t really need to do any profit taking. I quintupled my net wealth in the past 3 years. Gold would have to fall down to about $200 an oz and someone would have to liquidate my bank account to get me back to square one. I just replaced the word "gold" with "housing": "Once housing goes parabolic, I’ll start selling. This has been a healthy bull run with plenty of pullbacks to prevent it from getting out of hand so far. I don’t really need to do any profit taking. I quintupled my net wealth in the past 3 years. Housing would have to crash to get me back to square one."

35. StillLooking Follow Befriend 27 threads 233 comments Skokie, IL

    35   1:50pm Tue 21 Sep 2010   Share   Quote   Permalink   Like   Dislike (1)   I'm heavy in gold and silver at $400 and $6(heavy for my resources anyway) and I ain't selling for the same reason I aint buying a house. Houses are still too expensive and the government is dead set on trying to raise housing prices which will only raise gold prices.

36. theoakman Follow Befriend 2 threads 645 comments

    36   3:18pm Tue 21 Sep 2010   Share   Quote   Permalink   Like   Dislike   Nomograph says theoakman says Once Gold goes parabolic, I’ll start selling. This has been a healthy bull run with plenty of pullbacks to prevent it from getting out of hand so far. I don’t really need to do any profit taking. I quintupled my net wealth in the past 3 years. Gold would have to fall down to about $200 an oz and someone would have to liquidate my bank account to get me back to square one. I just replaced the word “gold” with “housing”: “Once housing goes parabolic, I’ll start selling. This has been a healthy bull run with plenty of pullbacks to prevent it from getting out of hand so far. I don’t really need to do any profit taking. I quintupled my net wealth in the past 3 years. Housing would have to crash to get me back to square one.” Actually you didn't. Btw...where were all those pullbacks in the housing market during it's run from 2000-2006?

37. theoakman Follow Befriend 2 threads 645 comments

    37   3:19pm Tue 21 Sep 2010   Share   Quote   Permalink   Like (1)   Dislike   Nomograph says theoakman says Maybe you missed the part above where I said how fun it’s going to be to sell it to all the suckers who will be the last ones in the door. Once Gold goes parabolic, I’ll start selling. You won’t know when gold goes parabolic until after it happens. How do you know we aren’t sitting at the top of an inverted parabola? You don’t. An good investor would dollar-profit-average as a hedge. A gambler would try to time the market. Don’t try to make suckers out of people until you’ve assured it won’t be you, Theo. Weren't you singing this tune around $500 dollars ago? A "good investor" would have missed out on all those gigantic gains I made in mining stocks. And yes, I did take some profit there. I put a lot of it in Potash of Saskatchewan because Marc Faber told me to. Oops. The rest of it went into my down payment.

38. klarek Follow Befriend (7) 1 threads 1,217 comments

    38   5:50pm Tue 21 Sep 2010   Share   Quote   Permalink   Like   Dislike   So iwog, let me get this straight... You think that the housing market has bottomed and is healthy, AND gold is going to continue appreciate in value? I don't find these views inconsistent since any severe inflation might prove you right (at least in gold). But you sort of remind me of a just barely-survived dot-com investor that believed the housing market in 2005 would continue to go up. Don't you see asset bubbles when they stare you in the face?

39. schmitz_kris Follow Befriend 36 threads 178 comments

    39   6:11pm Tue 21 Sep 2010   Share   Quote   Permalink   Like   Dislike   How is AU a bubble? Look at where interest rates are. Look at debt levels. Look at the various governmental responses to the economic collapse. Look at unemployment. Look at pretty much ANY genuine economic fundamental, and then come back here and tell me that increasing one's holdings of a crisis hedge does not make sense and therefore must be solely rising due to baseless speculative behavior.

40. klarek Follow Befriend (7) 1 threads 1,217 comments

    40   7:01pm Tue 21 Sep 2010   Share   Quote   Permalink   Like   Dislike   I'm not saying it is, I'm saying it very well could be. It's like in 2006 someone saying "How is housing a bubble? Look at interest rates. Look at employment." Gold is extremely speculative and volatile in today's markets.

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