Thursday, Jan 28, 2010
Positive comments from Soros
Telegraph: Davos 2010: George Soros warns gold is now the 'ultimate bubble'
Mr Soros, arguably the most famous hedge fund manager in history, warned that with interest rates low around the world, policymakers were risking generating new bubbles which could cause crashes in the future. In comments delivered on the fringe of the World Economic Forum, Mr Soros said: "When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment. The ultimate asset bubble is gold."
Posted by hpwatcher @ 08:23 AM (1518 views) Add Comment
19 Comments
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1. hpwatcher said...
Very important comments from Soros that will drive the price down, and thereby stopping the market from overheating - which is the last think anyone wants!
2. str 2007 said...
I did mention the other day that it looked (in sterling) terms as though the Gold chart had formed a double top (bearish pattern).
Another poster came back with a logarithm calculation saying it was forming a cup and handle (bullish) pattern.
Oh well, at least if I'm wrong I can say George was on my side.
All I can say is whether it's Gold, houseprices or anything else, you seem to be able to find equally convincing and bearish and bullish comments.
3. hpwatcher said...
Looking at the UK, and especially housing, one would think that bubbles don't burst any more. New paradigm?
4. inbreda said...
For us I guess it depends on which, in relative terms, crashes faster - gold or the GBP.
5. tyrellcorporation said...
Surely he's just trying to drive it down a bit so he can wade in a buy it all.
6. freemanphil said...
STR 2007, it was me about the cup and handle. You have to look at all the precious metals and currencies to see the pattern. Right now, the cup and handle is most apparent in Euro's. Sterling is benefiting from problems in Ireland and Greece, but, this will be temporary and the resistance levels have not been broken. I doubt they will, because of all the bad news coming out about Sterling. Our socialist masters are devaluing our currency to avoid it being more successful than the crumbling Euro, because transnational currencies are necessary to prop up the corporatocracy. Just visit Ireland to see how much inflation they've had. Beer used to be cheaper there. Its now over 7 Euro's a pint in many pubs in Dublin. And much of that inflation went into tax cuts for the corporations (not the people), and for big infrastructure projects that profit big corporations that the people wanted but didn't need, like motorways, when their DART system is creaking at the seams.
Right now, the battle is the breakout in silver, because silver coins are the real competition for the establishment, because they can be used in black markets and to buy groceries, by-passing paper money. That is why bronze coins were not produced after 1991, because the establishment knew that their inflation was giving bronze pennies a bullion price worth more than the face value. Just look at the new pennies, they are copper plated steel. Check em with a magnet. I just wish that silver coins weren't subject to VAT, because I absolutely love old England coins, but they aren't good for investment compared with gold.
7. freemanphil said...
To confirm my point, silver is still waiting to reach new highs. It is more suppressed than gold, so far as I understand. Once it breaks out, then is the beginning of the bubble in gold. There will be a time to jump ship, but not now, because the exponential curve has only just begun, imho. If interest rates went into double figures today and the stimulus was reversed, I'd be in cash, but even 5% interest rates would be too low, so, I'm bearish gold for quite some time now. The question is, do you trust government to protect the value of their paper money, when they give it so freely to their friends?
8. freemanphil said...
Gold hasn't yet reached half of its inflation adjusted 1980's peak. Obama's spending cuts was a small percentage of the overall budget and can they really end stimulus and hike interest rates? Can they be fiscally conservative? That is the question. But to me, its like swearing to have a diet after a pie eating contest.
9. alan_540 said...
@3 ...New Paradigm?
Don't you think we're in the "Return to normal stage"?
10. matt_the_hat said...
Was it Adam smith that said for something to be used as a store of value it had to have no commercial use (and other properties), gold fits the bill, silver does not. Just a thought freemanphil before you go long on silver.
11. str 2007 said...
freemanphil
'''so, I'm bearish gold for quite some time now'''
Did you mean to say that ?
12. str 2007 said...
Also if the currency is to be destroyed then surely huge debt is the best hedge on something you can actually use - like a house perhaps.
Just a thought.
13. debtfree said...
For whats it worth, in m opinion, India put a bottom in the market when they purchased a few tons at $1000 mark.
If the Chinese purchase a few tons when it goes below $1000 it will to reconfirm golds strength.
The only bubbles at the moment are $, £ and the derivative market.
14. Goldbug9999 said...
debtfree - I agree, I can't see how gold can return fully to pre-QE levels and even at $1000 I'm 10% in profit.
The downside seems limited and would require euro/$/£ to emerge from the next year without major drama, the upside is potentially huge ...
15. freemanphil said...
Ooops, I meant that, I'm bullish gold!!!
Silver? Because it is industrial it is more volatile, and, it could be damaged by deflation. Thus, if you think we've entered deflation, be short silver, but, silver could have a bigger rise during inflation. It is still the worst enemy of the state because it functions as change for small purchases, that is why, through bi-metalism, governments first got rid of silver, by fixing it at a lower price than its spot price vs gold, so it flowed out of the country.
16. freemanphil said...
Remember, inflation rose at the highest rate ever last month. So of course, the propagandists will be out saying that we have deflation, but if you'd have listened to them before, you'd have been wiped out flipping houses.
17. Crunchy said...
Gold in a bubble? Give me a break.
Can't manipulate it anymore Georgie and crew.
There are more and more reasons to buy gold as this chaos continues.
I wait on the US dollars dubious future also. It's good to be a bull again, in a bearish sort of way.
18. general congreve said...
str2007@12 - Huge mortgage in times of mass inflation a winner? If you get a long term fixed mortgage, yes. But if you're on the SVR I don't think the bank is going to let you get away with a free house, you'll see your interest rate increase in line with inflation.
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