Comments on: Why Gold could be a Bubble

By: Enquirica

Enquirica — Fri, 12 Nov 2010 03:41:24 +0000

Ultimately, the question is not how high gold can go, its how low fiat currency can go. While the debate about whether gold is in a bubble or whether we are in a deflationary or inflation environment continues, the monetary authorities in the developed world have embarked on a well-publicized campaign of currency devaluation via low interest rates. Central banks can control interest rates or exchange rates – not both – and they are opting for record low interest rates with little concern for the debasing consequences. There should be no debate on this matter – central banks have a perfect track record in one area and that alarmingly is in currency devaluation. The US and Canadian currencies have suffered a greater than 95% loss in purchasing power since the inception of their respective central banks. Enquirica Research has published a report – “Guide to Inflation Hedging 101″ go to http://www.enquirica.com/index.php?option=com_content&view=article&id=11&Itemid=19 and signup for access.

By: Best of 2009

Best of 2009 — Tue, 29 Dec 2009 12:07:27 +0000

[...] Canadian Capitalist cautious investors about the recent gold rush and points out why a gold bubble might be forming. [...]

By: Thicken My Wallet » Blog Archive » 2009 personal finance lessons from the rich and (in)famous

Thu, 10 Dec 2009 09:03:15 +0000

[...] to be sticking. Secondly, when main street starts telling you to buy gold, it may be a sign that a gold bubble is forming. Answering the question “when” is just as important as “what” in [...]

By: Jess

Jess — Wed, 02 Dec 2009 04:13:47 +0000

@Chris,

It’s called market manipulation.. =) j/k

By: chris

chris — Tue, 01 Dec 2009 23:10:37 +0000

if gold has more than doubled in 4 years, why hasn’t the value of the dollar halved in 4 years? arent they inversely proportional? thanks in advance.

By: Jim Alderon

Jim Alderon — Tue, 01 Dec 2009 00:52:44 +0000

Your comments on trading are scary do you actually believe this “The more you trade, the less your odds of even earning market averages”
I trade one stock all year long my 5 year average is double what the stock has done. If i can do it imagine what the pros are doing.
As for gold, my gold stock is up over %2000 in 5 years . Just because you missed the boat so far doesn’t mean it’s too late for you. The big liftoff is yet to come and thats when i sell %80 of it to the late comers.
I am keeping %20 in case it gets worse.

By: Basics of Investing, Carnival, and 6 Figure Income! | Financial Freedom

Basics of Investing, Carnival, and 6 Figure Income! | Financial Freedom — Sat, 28 Nov 2009 16:26:47 +0000

[...] Why Gold could be a Bubble @ Canadian Capitalist [...]

By: Weekly Round Up – Gold Bubble, Patience, Resume and More

Weekly Round Up – Gold Bubble, Patience, Resume and More — Fri, 27 Nov 2009 11:03:59 +0000

[...] set new records, is this the formation of another bubble? Canadian Capitalist shares his opinion on why gold bubble could be forming, and I could not agree [...]

By: Dale Rathgeber

Dale Rathgeber — Fri, 27 Nov 2009 02:33:56 +0000

Michael and CC: CC’s recent examples of black and white rules may be valid. But there are many other concepts in investing that are not. Even CC’s Rule #1 is illustrative of his flawed perspective, and rigidity. If investor A pays costs twice as high as investor B, but investor A’s retuns are 10 times higher, whose returns are higher? True wisdom comes from differentiating the true rules from: the guidelines, the tendancies, the probabilities and the random.

Ther is nothing personal here. I like this blog, and challenging CC to do even better, by questioning both his own system and others.

By: Jonathan

Jonathan — Thu, 26 Nov 2009 01:39:02 +0000

Haha, I love gold bugs! It’s not long before someone rolls out the big bad government line — “legal tender laws that force pretty pieces of paper on people by dint of government sanctioned violence.”

I hate to break it to you guys, but gold has no more inherent value than anything else we arbitrarily choose to use as currency. Gold is simply something that doesn’t corrode and is relatively rare. What do you think would happen if a large amount of easy to mine gold was found? Or if (/when) scientists are able to convert large amounts of metal into gold using nuclear physics?

Equivalently, if the US government actually failed and its currency became worthless, do you really think gold would hold its value? I would rather own equipment or food, personally.

Having a portion of your portfolio in gold isn’t a bad idea and isn’t necessarily at odds with the sleepy portfolio idea — you could hold something like 10% precious metals and rebalance along with everything else.

Buying physical gold and keeping it in your safe at home to protect you from inflation or the government is a little crazy though. You could buy TIPS (or the equivalent inflation protected bonds in Canada) and sleep easy.

Great blog, by the way, CC.