[Video] Marc Faber: Gold And Silver Won't Collapse... Unless...

[Confederate]

Marc Faber: Gold And Silver Won't Collapse... Unless...
CNBC | January 30, 2013


http://youtu.be/pajNmWmOOiI

[american.swan]

Like Marc says they can't collapse unless there's a huge deflationary collapse OR a bubble bursts, but we know gold isn't in a bubble yet.

[Zippyjuan]

How do you know it isn't in a bubble? Tripling in price over just about three years (2008- 2011 went from about $600 to around $1900) cannot be sustained (It seems it has peaked and is now slowly winding back down).

http://www.kitco.com/charts/livegold.html

Sharp gains in a short period of time are often indicators of a bubble- especially when the price run- up is significantly faster than rises in other prices.

http://www.investopedia.com/terms/s/...tivebubble.asp

Definition of 'Speculative Bubble'

A spike in asset values within a particular industry, commodity, or asset class. A speculative bubble is usually caused by exaggerated expectations of future growth, price appreciation, or other events that could cause an increase in asset values. This drives trading volumes higher, and as more investors rally around the heightened expectation, buyers outnumber sellers, pushing prices beyond what an objective analysis of intrinsic value would suggest.


Read more: http://www.investopedia.com/terms/s/...#ixzz2JfxNEQPg

[Confederate]

How do you know it isn't in a bubble?

How do you know it is?

[Zippyjuan]

How do you know it is?

See additions I made to my post.

[Zippyjuan]

Compare the gold chart to housing prices during their bubble:
http://en.wikipedia.org/wiki/File:Me...10_Monthly.png

[seapilot]

The housing prices was due to a credit bubble, gold prices are tied to the floating fiat value of the FRN. Has gold production expanded where its supply is greater than demand? Maybe the paper has but with the other countries wanting their reserves back it does not seem to be the case. Turn the gold chart upside down and it looks like the Dollar index chart here.

http://www.barchart.com/chart.php?sy...&txtDate=#jump

[Zippyjuan]

The gains in the price of gold outpaced both the rise in prices of other goods and commodities as well as the decline in the value of the dollar. Very indicative of bubble activity. But it won't necessarily pop as dramatically as the housing bubble did. The last gold bubble (which peaked in 1980) took 20 years to wind down. The current peak has been $1900. It is down about 15% from that.

[cbc58]

The gains in the price of gold outpaced both the rise in prices of other goods and commodities as well as the decline in the value of the dollar. Very indicative of bubble activity. But it won't necessarily pop as dramatically as the housing bubble did. The last gold bubble (which peaked in 1980) took 20 years to wind down.

I am not sure of this, but I think the invention of Mortgage Backed Securities played a huge role in the run up in home prices since it essentially supplied unlimited money to that sector. Gold also started shooting up with the formation of funds/stocks/ETF's that allowed the average person to invest in it and not have to buy physical - also directing large sums into it. Read an article on that sometime back.

I will bet that it will either go up or down in the coming months...

[Zippyjuan]

I will bet that it will either go up or down in the coming months...

Probably right there.