The golden bubble….

Let me start by saying I’m in no way a financial guru or an economist. What I have is this thing between my shoulders that I feed raw data to and it gives me an opinion divided by what I have gained in common sense over the years. Sometimes those opinions are spot on and sometimes they are not.

So I have been feeding the dome some data on gold prices. If you have been living under a rock, gold has made a 400% gain in the last 6 years.

Now it’s not hard to look at this chart and see the massive correction that happened in the 80’s. Now you dinks with a picture of Gordon Gekko on your desk …please spare me your explanation of that spike. Mining companies are allowed to hedge pricing to protect themselves from volatility. The derivatives market allows Wall Street to project what the price might be a year from now. How do you get the ACTUAL price of gold per ounce with all of this fluff that only serves those players with software built to capitalize on market volatility? What happens if a mining company makes a massive strike. Are they allowed to ration out the gold in order to keep the price inflated?

What happens to our country if the market flops tomorrow?

I’m sorry folks….the real price of gold is more like 900 dollars an ounce. Just like that condo in a triple decker on Talbot Ave you paid 400,000 for in 2004 is really only worth 175,000 today. It’s a big forkin bubble….

 

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