My Gold Theory

in #gold2 months ago (edited)

Wrote a paper about a decade ago about gold.

My theory was that gold would eventually end up being the biggest speculative bubble ever.

The logic went like this:
In the 90s peeps went ham for internet stocks, and most of them got burned because they didn't sell in time.
Naturally, they got more conservative.
In the 0s, peeps went ham for real estate, and most of them got burned because they didn't sell in time.
Naturally, they got more conservative.
In the 10s, peeps went ham for bonds, and most of them got burned because they didn't sell in time.
Naturally, they got more conservative.

So what's more conservative than government bonds? It really just comes down to gold. Gold is, at least historically, the safest asset. Governments go bankrupt, gold doesn't.

stocks → real estate → bonds → gold
Of course, reality never unfolds that conveniently. This was before the AI boom, this was before crypto got big, and there's always counter-trends that happen.

I can see people flocking to gold in the long-term, I can also see people looking at it like a shiny rock or cowry shells.
With that being said I do think bonds are toast in the long-term. The math isn't mathing.
but in the short-term they will go up, already have. My theory is that the fed follows the market, and so we could see a cut next week as high as 50 basis points.

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