Thread: Marc Faber Says World Heading for 'Major Inflection Point'

Originally Posted by Tom Sawyer

^
You're assuming they've all found the money to buy again.

Prices will fall until a buyer and a seller agree on a price. In a case where interest rates go up and allot of people go broke, there could be houses given away as long as the property taxes are paid.

Originally Posted by TizMe

Originally Posted by socal

There is no possible mathematical way that gold can crash in the next 10 years.

How can the current gold boom possibly be any different from any other past booms (and busts)?

The bubble is in the currency you are pricing gold in. It is not any different in this case because like usual, the general public doesn't understand.

Notice how everyone is experts and booms and busts now ? The general public thinks they have it figured out so they are staying in cash and cash equivalents because they believe that is safe. That is the bubble.

Originally Posted by Tom Sawyer

Yep - I recall that's exactly what happened in the early-mid 80's - as mortgage rates hit 20%.

And Socal will love this...those high interest rates coincided with the collapse in gold price. One could make far more in the bank on simple interest than stuffing gold bars inside their mattress.

Yep, that is what it took to convince people that the fiat dollar was worth buying again, 20% interest rates. In case you didn't notice, gold has everything to do with interest rates, it was no coincidence. Buying treasuries at 20% yield was like buying BP stock at 10% yield just after the oil spill. There was risk in the investment, that is why yields where high in both cases. (That is why you buy gold now, rates are at 0%)

Why would you bother renting out houses that are cratering in value when you could get a better yield just having the money in the bank at 20% interest ?

^ stop using logic, fools are fools and they love to be fools

Originally Posted by Tom Sawyer

Look how fast Gold falls when conditions change. Look at 1979 - From a peak of 800+ down to 500 in just a few months. A year or two later and it was trading just off 300. For the next 22 years it traded between 300-450 on average. Gold is a hedge, and when conditions change (the ones that made people buy gold in the first place) so too does the value - and fast.



Source: BBC

The average person does not understand the macro environment we are in. Just remember that gold never goes below its old lows. People like BF thought 45 dollar gold was overpriced and thought it would go to 20. No different then the people in the late 60s,70s that thought 300 gold was stupid and thought it would go back to 150. You cant say that about intenet stocks, tulips, railway bonds, or any other so called boom and bust.

I don't think the comparison you made to the 80s are relevant. If you know what I mean.....

putting all kind of silly graphs on concept you obviously do not understand doesn't take away the fact that Gold is currently in a bubble cycle

the only question that remains about Gold is when to sell, not when to buy

Originally Posted by robuzo

^It (comparison made to the 80s) isn't relevant. If US interest rates go up gold is going to be worth more US dollars, obviously.

The macro economic is very, very weird right now, in fact based on my admittedly limited knowledge of economic history that the current situation is unprecedented. I still think gold is a good hedge with some good arguments for a lot of upside, but that certain other commodities, like oil, might be even better. What is a barrel of oil priced in USD going to cost when (if) gold hits USD2000? And all the while one is holding those oil company shares they are paying dividends, while physical gold is just sitting there, looking pretty.

Whether its oil companies in your case, farm land in ripleys case, rental houses in Tomwhatevers case or US treasuries in Butterknownothings case, it is clear to me that everyone hates gold. Nobody understands it and nobody is buying it. Even people that have made money on it dont like it. That is not the sentiment that makes up an asset bubble.

Gold is cheap.

Silver looks a better buy right now than gold

Originally Posted by socal

you said hedge funds but you dont know what those are.

Originally Posted by socal

Surgar hit a 30 year high today, wheat is up 60% in three months. Do you think those are asset bubbles too

yep

only if you understood the mechanics behind commodities futures and what they represent in the last few years

Originally Posted by socal

Nobody understands it and nobody is buying it.

obviously someone is buying, and yes, it doesn't mean he understand it

Originally Posted by socal

Originally Posted by robuzo

^It (comparison made to the 80s) isn't relevant. If US interest rates go up gold is going to be worth more US dollars, obviously.

The macro economic is very, very weird right now, in fact based on my admittedly limited knowledge of economic history that the current situation is unprecedented. I still think gold is a good hedge with some good arguments for a lot of upside, but that certain other commodities, like oil, might be even better. What is a barrel of oil priced in USD going to cost when (if) gold hits USD2000? And all the while one is holding those oil company shares they are paying dividends, while physical gold is just sitting there, looking pretty.

Whether its oil companies in your case, farm land in ripleys case, rental houses in Tomwhatevers case or US treasuries in Butterknownothings case, it is clear to me that everyone hates gold. Nobody understands it and nobody is buying it. Even people that have made money on it dont like it. That is not the sentiment that makes up an asset bubble.

Gold is cheap.

In my case I won't say more than that you have come to the wrong conclusion. I just am not putting all my eggs in one basket. I like gold as a hedge. I think oil has more upside, but am not betting everything on that, either.

Originally Posted by Butterfly

putting all kind of silly graphs on concept you obviously do not understand doesn't take away the fact that Gold is currently in a bubble cycle

the only question that remains about Gold is when to sell, not when to buy

As much as I think BF is a faggy moron, he's nailed this. This bubble will pop once a currency stabilizes - whether USD, Euro, YEN, RMB - or more likely a combination of all. Be well clear of gold when that appears to be happening. Oh, and is anyone stupid enough to think that those who have the power to stabilize these currencies aren't WAY AHEAD OF YOU and manipulating things?

Pyramid Power..101.

Originally Posted by Blake7

Silver looks a better buy right now than gold

That's the odd thing, silver always looks better, and makes a lot more sense, but it seems a lot harder to predict.

[quote=Tom Sawyer;1594619]

Originally Posted by Butterfly

putting all kind of silly graphs on concept you obviously do not understand doesn't take away the fact that Gold is currently in a bubble cycle

the only question that remains about Gold is when to sell, not when to buy

As much as I think BF is a faggy moron, he's nailed this. This bubble will pop once a currency stabilizes - whether USD, Euro, YEN, RMB

You have it backwards. The bubble is in the fiat currency you are pricing gold in. The chaos in the currency markets has not even happened yet.

- or more likely a combination of all

You forgot the most important currency, gold.
.

Be well clear of gold when that appears to be happening.

be well clear of cash and bonds when that 30 year bubble bursts. Gold is the best place to hide.

Oh, and is anyone stupid enough to think that those who have the power to stabilize these currencies aren't WAY AHEAD OF YOU and manipulating things?

Pyramid Power..101

Reminds me of the Soviet Union.

There is not one big happy family of world leaders out there that have everything under control.

explain to us how Gold is a currency again ?

can I buy my grocery with Gold ? of course not

Originally Posted by Butterfly

explain to us how Gold is a currency again ?

can I buy my grocery with Gold ? of course not

Cotton hit an all time high today, so did the Aussy dollar. Are they in bubbles too ?

can I buy Gold with cotton ?

can I buy oil with Gold ?