I found this on Credit Writedowns today: "Roubini: Cheap Money is Creating the Next Asset Bubble".
If and when the good Doctor Roubini is everywhere as he was the winter of 2009, the next bottom will be in.
Yes, and it looks as though the finalists are shaping up to be U. S. Treasuries vs. gold. Semifinalists include silver on the gold side of the draw, which will ultimately lose to gold though it may surge as it did in the Hunt brothers time, and stocks on the fiat money side of the draw with Treasuries.
As intimated here numberless times, gold is relatively unloved. Louise Yamada has been bullish on gold for years. Her short-term target is $1350/ounce. I believe that many months ago, Barry Ritholtz tabbed that same price as his (then intermediate-term) target. $1350 would be a 10% or so move up from the December high.
We are now seeing Irish protesters getting violent due to the bank bailouts.
It is past time for providers of capital to take their hits. This includes debt to equity swaps of bond holders in bank holding companies. Pensioners and labor cannot get squeezed forever. Too many promises have been made to too many interests. The owners of bank bonds and retirees are on opposite sides of the same boat. Neither interest is bad. But the real economy is struggling to keep all promises. The chaotic, inflationary result is what we see, a gold price that appears to be like an inner tube under water. It wants to reach its proper level.
We may find out in the fullness of time that the proper price for gold all along is $35/ounce, or some larger number, and all this upmove is manipulated, just as the NASDAQ was worth much closer to 500 than the 5000 in hit early in 2000. But for now, unlike the frenzied NASDAQ peak, the country is not rocking to the beat of a rising gold price, and the ratios of gold to other financial instruments such as stocks and Treasury rates is historically average.
Thus if gold is entering a bubble, it has plenty of potential on the upside. Just please don't think that any financial asset is forever unless one is thinking in terms of multiple lifetimes.
It is believed here that it is not too late to buy or add to positions in gold.
Please note that Econblogreview is not an investment adviser and is expressing this blogger's individual views, and that yours truly is "long" various gold and silver instruments.
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