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Are we in a Gold Bubble
19 April 2006 | Jim Verdolini

Posted on 04/19/2006 11:08:46 AM PDT by Jim Verdolini

Are we in a Bullion Bubble? Gold and silver are rocketing to new highs. Look at the trend:

Monday Gold was over $604 and silver $13.33. By the end of the day Gold was $618. Tuesday it was Gold $620 and Silver $13.55. This Morning Gold $624.90 and Silver $14.16. Right now Gold is $632.70 and Silver $14.54!

I have read that there are two major things, in addition to oil prices, causing the rise. For Gold it has to do with a rumor that China plans to convert a small bit of their dollar reserves to Gold. For silver, there is a rumor that the metal will be traded differently and more vigorously. If China was to convert only 3% of their dollar reserves to gold, that would be the entire worlds production for a year!

I bought my wife a small gold crucifix last month. The chain supporting it was so frail that it broke in less than 2 weeks. I replaced it with a more serious chain and the store gave me a $20 credit on the flimsy old chain that weighs about nothing.


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Are we in a Gold bubble?
1 posted on 04/19/2006 11:08:47 AM PDT by Jim Verdolini
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To: Jim Verdolini

Nope, we are watching the slow death of fiat money. Short term, sure its probably run too far too fast, but expect 4 digits in the gold price in the not too distant future.


2 posted on 04/19/2006 11:11:24 AM PDT by getsoutalive
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To: martin_fierro; Petronski

bling ping


3 posted on 04/19/2006 11:11:57 AM PDT by Tijeras_Slim
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To: Jim Verdolini

No! Gold is undervalued! Buy more now!

I hear that Gold.com is going for 1,527.38 and is expected to increase another 152% this week!

I have a special program for people who want to magnify that gain so that their $1,000 investment can generate $100,000, you heard right! $100,000 in returns by Tuesday! Next Tuesday!

Do you want to be rich? Isn't it only fair that you retired in the Caribbean by May?

If so, give me a call at 1-800-555-DUMB and I'll send you my free* gold buyers guide.

* For a nominal $39.99 cash fee for shipping and handling

< / bubble>


4 posted on 04/19/2006 11:12:39 AM PDT by Uncle Miltie (Why did Allah create free will and then demand submission? Wouldn't robots have been easier?)
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To: Jim Verdolini

The GoldBugs are going to bite you!


5 posted on 04/19/2006 11:12:58 AM PDT by rightinthemiddle (Islamic Terrorists, the Mainstream Media and the Democrat Party Have the Same Goals in Iraq.)
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To: Jim Verdolini

Gold's value always stays about the same - it's the currencies that are deflating.


6 posted on 04/19/2006 11:13:13 AM PDT by Mr. Jeeves ("When the government is invasive, the people are wanting." -- Tao Te Ching)
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To: Mr. Jeeves

Probably true. I bought my small reserves a year ago when it was about $440 an oz. It is fast becoming too expensive to buy. Silver is another issue. One can buy a lot of $14 silver if one believes it is going to go way up.


7 posted on 04/19/2006 11:15:46 AM PDT by Jim Verdolini (We had it all, but the RINOs stalked the land and everything they touched was as dung and ashes!)
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To: Brad Cloven
I hear that Gold.com is going for 1,527.38 and is expected to increase another 152% this week

Good collectable specimen gold and gold/quartz has been at that price for years.

8 posted on 04/19/2006 11:16:03 AM PDT by tertiary01 (May 1st-- PINKO DE MAYO shop til you drop)
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To: Jim Verdolini

Nope, a collapse of the dollar I would say.

This country has to get off it's lazy arse and start creating items of value.


9 posted on 04/19/2006 11:16:13 AM PDT by mr_hammer (They have eyes, but do not see . . .)
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To: rightinthemiddle

Imagine what it is like now as a result of being bitten when the price was $290.......


10 posted on 04/19/2006 11:17:19 AM PDT by bert (K.E. N.P. Slay Pinch)
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To: Tijeras_Slim; martin_fierro; Toddsterpatriot

Time in a gold thread before mention of fiat money (ooooooh!): 2 minutes 37 seconds.


11 posted on 04/19/2006 11:19:13 AM PDT by Petronski (I love Cyborg!)
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To: getsoutalive

"we are watching the slow death of fiat money"

Agreed, this has been predicted years ago only to be po-pood by the elite fund managers.

Hey, anybody know where Greenspan is?


12 posted on 04/19/2006 11:19:49 AM PDT by mr_hammer (They have eyes, but do not see . . .)
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To: mr_hammer

"This country has to get off it's lazy arse and start creating items of value."

Like gold?


13 posted on 04/19/2006 11:20:17 AM PDT by Jim Verdolini (We had it all, but the RINOs stalked the land and everything they touched was as dung and ashes!)
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To: Petronski

I always thought Alfa Romeo money was sportier.


14 posted on 04/19/2006 11:20:43 AM PDT by Tijeras_Slim
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To: bert

Did you buy and hold since $290?


15 posted on 04/19/2006 11:20:45 AM PDT by rightinthemiddle (Islamic Terrorists, the Mainstream Media and the Democrat Party Have the Same Goals in Iraq.)
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To: rightinthemiddle

yes


16 posted on 04/19/2006 11:21:27 AM PDT by bert (K.E. N.P. Slay Pinch)
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To: bert

Good for you. Most would be trading.


17 posted on 04/19/2006 11:22:06 AM PDT by rightinthemiddle (Islamic Terrorists, the Mainstream Media and the Democrat Party Have the Same Goals in Iraq.)
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To: getsoutalive
Nope, we are watching the slow death of fiat money.

We'll never see the end of fiat money. That's wishful thinking.
18 posted on 04/19/2006 11:22:58 AM PDT by A Balrog of Morgoth (With fire, sword, and stinging whip I drive the RINOs in terror before me.)
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To: mr_hammer
Nope, a collapse of the dollar I would say. This country has to get off it's lazy arse and start creating items of value.

I agree 100%.

19 posted on 04/19/2006 11:23:23 AM PDT by staytrue
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To: getsoutalive

Are we about to see the formation of a perfect storm of huge trade deficits, devaluing dollar, housing bubble, Iran, rioting Mexicans, budget deficits (+ Lord knows what else)?


20 posted on 04/19/2006 11:24:00 AM PDT by american spirit
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To: Jim Verdolini

The Asians with their new found wealth are the reason the commodities markets are climbing quickly. One only needs to look at the price we are paying for gas. People it is not that gas is going up. It is the fact that your dollar is becoming worth less. Anyone look at the prices of gold, silver and copper lately?

"More than half of all industrial goods are made in its factories. The production and export of these goods, their prices kept low by Beijing's manipulation of the renminbi currency, has generated the cash behind China's growing economic power."


http://news.independent.co.uk/world/americas/article358568.ece


21 posted on 04/19/2006 11:24:41 AM PDT by mr_hammer (They have eyes, but do not see . . .)
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To: staytrue

But we do create things of value, we just do it in other countries...hehehe


22 posted on 04/19/2006 11:25:47 AM PDT by DonaldC
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To: Brad Cloven

Hot air like that was spewing vigorously when gold rose through $300. It became rabid hot air as gold worked its way up. Lately, the hot air has cooled a bit as the turkeys stutter to explain gold's relentless climb. I may take my gold profits, but only when the hot air ceases and the turkeys start buying gold. For once, I got in at the bottom of a bull market. It feels great!


23 posted on 04/19/2006 11:26:00 AM PDT by ghostrider
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To: Jim Verdolini

Cisco. Broadcom. Qualcomm. Krispy Kreme. But gold is different.

Supply and demand? The demand is from hoarding.


24 posted on 04/19/2006 11:26:06 AM PDT by rightinthemiddle (Islamic Terrorists, the Mainstream Media and the Democrat Party Have the Same Goals in Iraq.)
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To: Petronski
"Time in a gold thread before mention of fiat money (ooooooh!): 2 minutes 37 seconds."

All your fiat are belong to us!<\b>

25 posted on 04/19/2006 11:27:14 AM PDT by Uncle Miltie (Why did Allah create free will and then demand submission? Wouldn't robots have been easier?)
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To: A Balrog of Morgoth

Biggest buyers of gold are orientals and middle easterners. I wonder what is going on in those areas that might make them want to buy gold?? Seen this before. My guess is a lot of the new wealth of China is being stored in gold (ditto) middle east. That, to my way seeing it is not a bad move on their part. These guys tend to buy alot of US Treasuries, but with the current yield and the currency risk they probably feel safer in gold. Also, buying bonds leave trails that central governments can observe, while gold can be hoarded.


26 posted on 04/19/2006 11:28:18 AM PDT by tigtog
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To: american spirit

The good thing about that perfect storm is that it will break right about the time Hillary steals, um I mean wins, the next election. It could mean the end of Demo presidents for years.


27 posted on 04/19/2006 11:28:24 AM PDT by PaForBush
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To: A Balrog of Morgoth
We'll never see the end of fiat money. That's wishful thinking.

Never is a loooong time. Fiat is relatively young in this country. It won't come without major pain, so I am not really wishing for it, just being prepared.

28 posted on 04/19/2006 11:29:57 AM PDT by getsoutalive
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To: Tijeras_Slim

Naw, you want Ferrari or Lamborghini money if you want sporty...


29 posted on 04/19/2006 11:30:01 AM PDT by BeHoldAPaleHorse ( ~()):~)>)
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To: rightinthemiddle

"The demand is from hoarding."

That's to limited, look at silver, copper, lumber, crude, energy, etc., etc., etc. Party is over boys, real problems that must be dealt with quickly.


30 posted on 04/19/2006 11:31:25 AM PDT by mr_hammer (They have eyes, but do not see . . .)
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To: american spirit
Are we about to see the formation of a perfect storm of huge trade deficits, devaluing dollar, housing bubble, Iran, rioting Mexicans, budget deficits (+ Lord knows what else)?

About to see? Dunno. Timing these things is a fools errand. But it becoming increasingly obvious that something wicked this way comes.

31 posted on 04/19/2006 11:31:27 AM PDT by getsoutalive
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To: tigtog
Biggest buyers of gold are orientals and middle easterners. I wonder what is going on

When you are a rich despot like saddam, it pays to have a little gold around. The old iraqi dinar is not going to buy much. The chinese still remember when the commies took over. Unless you owned portable, stable wealth, you were out of luck.

32 posted on 04/19/2006 11:32:19 AM PDT by staytrue
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To: Brad Cloven

I have a special program for people who want to magnify that gain so that their $1,000 investment can generate $100,000.

sounds like it should be 1-800-Hillary


33 posted on 04/19/2006 11:33:26 AM PDT by Proud_USA_Republican (We're going to take things away from you on behalf of the common good. - Hillary Clinton)
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To: Jim Verdolini
Live spot price.

.


34 posted on 04/19/2006 11:34:15 AM PDT by bjs1779
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To: Jim Verdolini

There's lots of room for gold to climb.

what was the high, $800 oz around 1980?

What cost $800 in 1980 would cost $2031.73 in 2005.
Also, if you were to buy exactly the same products in 2005 and 1980,
they would cost you $800 and $315.00 respectively.

Remember the Hunt brothers and $50 silver?
What cost $50 in 1980 would cost $126.98 in 2005.
Also, if you were to buy exactly the same products in 2005 and 1980,
they would cost you $50 and $19.69 respectively.

Gold like housing keeps pace (usually) with inflation.

Fun calculator to play with @ http://www.westegg.com/inflation/


35 posted on 04/19/2006 11:35:56 AM PDT by zek157
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To: bjs1779

The natural resources fund in my 401K is on FIYAHHHHH.


36 posted on 04/19/2006 11:36:18 AM PDT by Proud_USA_Republican (We're going to take things away from you on behalf of the common good. - Hillary Clinton)
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To: Jim Verdolini

As times grow darker, gold glows brighter.

Now, whether it glows X$ brighter is always the question.

But it's always a comfort to have a little metal in your stash as an insurance bet.


37 posted on 04/19/2006 11:36:56 AM PDT by NaughtiusMaximus (Join me! Every night I pray for Global Warming . (And I think it's beginning to work.))
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To: bjs1779

Gold moves like an earthquake. The stress slowly builds, but gold remains constant. Occasional flutters release energy, but the market doesn't move much. Stress continues to build. Everyone sees it building, but no one wants to try to predict a once in a generation move. Having never experienced a major break, the younger folks discount the threat. Meanwhile the pressure keeps building until suddenly the market breaks upward. Those prepared get a memorable ride. Those unprepared get a face full of dust.


38 posted on 04/19/2006 11:44:37 AM PDT by ghostrider
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To: Brad Cloven

LOL, for $200 extra, will you send me "the Evils of Fiat money, die economy die" and the bamboo steamer?


39 posted on 04/19/2006 11:46:24 AM PDT by stacytec (Nihilism, its whats for dinner)
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To: zek157
What cost $3500 in 1971 would cost $16650.33 in 2005.

Average car in 1971 cost what? Around 3500.00? That was 80 oz of Gold back then.

Same 80 ounces of Gold today is 51,000.00

40 posted on 04/19/2006 11:47:32 AM PDT by bjs1779
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To: ghostrider

The problem, at least for me, is the price has reached a point where I cannot afford my normal monthly Eagle buy. I do not own enough to make a real killing and want to hold what I do have for another 20 years, then take one heck of a vacation. I still want to buy but not at $630....I will have to buy silver, though I do not believe silver has as much room for growth.


41 posted on 04/19/2006 11:49:13 AM PDT by Jim Verdolini (We had it all, but the RINOs stalked the land and everything they touched was as dung and ashes!)
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To: Jim Verdolini

Think of a zillion other people in your exact position, and IMO you'll see that silver is far more undervalued than gold.


42 posted on 04/19/2006 11:55:52 AM PDT by Attention Surplus Disorder (Funny taglines are value plays.)
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To: Jim Verdolini
There are mini contracts available.

.

Contract Name Symbol Months Tick Size Trading Unit Min Fluc Init Margin Maint Margin
Aluminum AL All 12 $0.0005 per pound 44,000 pounds of aluminum (.05¢) per pound $1,500 $1,500
Gold GC All 12 $.10/oz. = $10.00 100 troy ounces 10 pts=$10 $2,362 $1,750
Copper High Grade HG All 12 0.05 ¢/lb. = $12.50 25,000 pounds 5 pts=$12.50 $3,038 $2,250
Palladium PA All 12 $0.05 (5 cents) per troy ounce ($5 per contract) 100 troy ounces 5 pts=$5 $2,700 $2,000
Platinum PL All 12 $0.10 (10 cents) per troy ounce, $5 per contract 50 troy ounces 10 pts=$5 $2,700 $2,000
Silver SI All 12 $.001/oz. = $5.00 5,000 troy ounces 50 pts=$25 $3,038 $2,250
NY Mini Gold YG All 12 10 cent/fine troy oz 33.2 fine troy oz. 10 cent/fine troy oz $338 $250
NY Mini Silver YI All 12 $.001/troy oz. 1,000 troy ounces. $.001/troy oz. $459 $340
100 oz Gold Futures ZG All 12 10 cent/fine troy oz 100 fine troy ounces 10 cent/fine troy oz $1,822 $1,350
5,000 oz Silver ZI All 12 $.001 per troy ounce 5,000 fine troy ounces $.001 per troy ounce $1,822 $1,350

43 posted on 04/19/2006 11:58:55 AM PDT by bjs1779
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To: Jim Verdolini

I understand your hesitation. Although I think the dollar is becoming worthless, I quit buying my fund when gold was at $400. I am not yet ready to sell, but I am watching things closely. I can't eat gold, but in a sick world like this, I may need it to buy bread. My college professor told us to use gold as insurance. Buy enough of it to cover things if a German, Russian or Argentine style devaluation occurs. Hope that it doesn't happen and be happy if you take a loss because times were good.


44 posted on 04/19/2006 12:02:24 PM PDT by ghostrider
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To: NaughtiusMaximus
But it's always a comfort to have a little metal in your stash as an insurance bet.

An insurance bet against what?

45 posted on 04/19/2006 12:02:38 PM PDT by Labyrinthos
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To: Brad Cloven
LOL. The AM dial is inundated with such horse manure. These are guys that bought gold when it was $311/oz. Now they're ready to sell at a huge profit, but who will buy without assurance it will go (higher, higher HIGHER!)?

I take such "advice" with an entire saltlick.

46 posted on 04/19/2006 12:05:07 PM PDT by William Terrell (Individuals can exist without government but government can't exist without individuals.)
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To: bjs1779

1971 is a convenient year. 1980 is an inconvenient year. Your 80 oz that are now worth approx $51K were worth approx $64K then. Run that comparison to inflation over the last 26 years...


47 posted on 04/19/2006 12:05:22 PM PDT by pgyanke (Christ has a tolerance for sinners; liberals have a tolerance for sin.)
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To: Labyrinthos

Gold is insurance against a loss of faith in official authority and the money backed up by it...


48 posted on 04/19/2006 12:15:34 PM PDT by oblomov (Join the FR Folding@Home Team (#36120) keyword: folding@home)
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To: oblomov

OK. But let's assume that gold is riding a bubble that is about to burst like it has many, many times in the past. How does gold provide insurance against anythng if, as in 1981, for example, the price peaks at around $800 an oz. and then heads into a steep decline where it stays for the next 22 years or so?


49 posted on 04/19/2006 12:22:57 PM PDT by Labyrinthos
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To: Labyrinthos

"An insurance bet against what?"

Are there any shortfalls in potential disasters? The housing bubble, bird flu, Iran, the deficit, China not to mention 50% of the country that is clueless on basic economics and the other party, the one in power, clueless about spending restraint?

Lots of potential bad stuff out there. What if the tax and spend democrats take over. If you think the republicans in congress are out of control wild spenders, imagine democrats who both spend like holywood trophy wives and disarm us in the face of terror.


50 posted on 04/19/2006 12:29:34 PM PDT by Jim Verdolini (We had it all, but the RINOs stalked the land and everything they touched was as dung and ashes!)
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