The big difference is that the stock market is down (excluding dividends!) on an inflation adjusted basis for about 10-15 years. Gold is still down after 30 years and it didn't even pay a dividend in the meantime.

gold is down after thirty years?
http://www.goldprice.org/gold-price-...ear_gold_price
inflation adjusted high for gold over $2,000, go ahead and short it...

it's true that the dividends aren't included in those calculations... but the dividends on most stocks in the US are pretty small.

also, gold is only down over the last 30 years when you compare it to its last bubble high. don't forget, gold went from $35 all the way to $850. So it was in a bubble when it made it up to $850, and it's not really fair to compare gold at its bubble highs to the current price. Gold went up more than 20 fold during that last bull run. So it's only down over the last 30 years if you compare it to the peak of the bubble. not really a very fair comparison point IMO. obviously if you bought at the peak of the gold bubble when gold was $850, that was a pretty stupid investment. if you just bought something after it went up 20x, it's no shock that you didn't make any money. and no one ever said that gold was the best long term investment out there... gold is good during certain time periods, (like 1971 - 1981)... so gold had a 10 year bull market. then stocks were in a bull market for the next 20 years (1981 - 2001)... and then gold has been in a bull market since (2001 - 2009).

but my point is still valid that we only talk about "inflation adjusted highs" when it comes to gold, and we never hear anyone say the same thing about the stock market

he meant to say on an inflation adjusted basis

Well first,to another post above a huge problem with physical is you are subject to the "collectables" tax..which is brutal vs long term capital gains..Just another reason I wouldn't deal with physical again.

No offense to Intrepid but the above line of thought is just a bad way to speculate...If you expect another collapse you should be waiting for better prices...gold has and always will make humans irrational for whatever reason.

While I do agree you can't knock a dollar index adjusted DOW vs gold here...
The DOW has literally collapsed if you adjust for how much of the DOW you could have bought in the past. The irrational part though is does that mean you buy gold or does that mean you buy the DOW? The DOW is vastly underpriced vs gold here.
The other problem with gold is most of the guys who are sopposed to be gurus are morons and just sell news letters....If you invest in gold, make sure to not get sucked into the "gold community" of crooks, morons and bandits.

guy trys to sell 1 oz gold coin for $50.......this is how you know gold isnt a bubble yet.....
http://www.youtube.com/watch?v=Gk5aRIz17fk

But comparing gold to stocks in a bubble situation (1999, 2007-2008) is fair, right?

in 5 years when every person on the street is talking about gold and their are as many shows on panning for gold as their are on home flipping 2 years ago-today and mining gold becomes profitable in all countries as it is only profitable in some today

this is awesome, not a bubble, people are stupid
I love the lady who wouldn't take it for free!!!!!!!!

what are you trying to say? that stocks were in a bubble? that gold is in a bubble?

keep in mind though, during the previous gold bull market, gold went from $35 all the way up to $850. But after the bubble peak at $850, it fell back down to a more realistic valuation at around $350. So basically, the move from $35 up to $350 was a legitimate bull market with strong fundamentals behind the move. then the move from $350 up to $850 was the result of the bubble mania. But that doesn't mean that the whole bull market was just a big bubble... the mania only came at the end of the secular bull market. So comparing that to today, i think the move in gold from around $300 up to $1100 is the result of a legiatmate secular bull market, supported by the fundamentals, and i think this bull market still has a long way to go before we reach bubble territory. So i think gold can go to $3000 - $5000 pretty easily. Then, if the Fed raises rate up to 20% again to defend the dollar and the government starts doing the right thing, then that will probably be as far as the legitamte bull market would take us... then any move to $10,000 or higher would be the result of a bubble. But if the Fed doesn't raise rates and we continue down this same path, than gold will not stop at $5000 or $10,000 and it will just continue to move higher as the dollar continues to be debased.

Because keep in mind, the only thing that stopped gold's rise in the late 1970s and early 1980s was the fact that paul volker came in and made the hard choices by raising rates to 20%... had he not done this, gold would have gone much higher than $850. So if Bernanke keeps that at 0% indefinately, and the government continues to spend money (which they will because of social security and medicare obligations alone), and the fed continues to accodate all this spending, than gold will be going much much higher.

This kind of post amuses me since I started out as a gold bug 6 years ago...same exact puppeted newsletter writer nonsense with no real analysis to be found 5 years ago, even though 2009 is almost over.
The fallacy of your logic is that gold will always be mined in grams/per ton of ore..Even a great property has a real problem as far as input cost..not to mention financing those inputs cost, all that are somewhat inversely correlated to gold price...So you are basically betting on irrational demand that forces gold prices beyond the input costs..it wont happen. Its as foolish as the morons who moved to california at the height of the gold rush.

Jesus man you need to smoke a joint and ****ing relax. It wasn't any serious analysis, the guy was claiming gold was a bubble and comparing it to dotcoms and housing so I put gold in that perspective for him

I was waiting a while for better prices, but I now believe that was a mistake. My bullion purchases are for the purpose of achieving my long term asset allocation goals; I am still underweighted in tangible assets (i.e., bullion, real estate, collectibles, etc). I regard my attempts to make money by shorting silver/gold ETF's in a long term bull market as more questionable, but I did not lose much in these hedge positions (and these short positions never exceeded the value of my bullion). I have followed a similar strategy with stocks (periodically hedging my long term stock holdings by shorting stock ETFs) and managed to show a small profit on these short positions. Nevertheless, I am currently inclined to give more respect to the trend of the market and stop trying to pick tops.

Gold and inflation explained
http://www.youtube.com/watch?v=U-tI-...layer_embedded

I dare the author of that video to measure the price of the CPI basket in gold in 1980 and measure the same, unchanged, basket in 2009.

why are you choosing golds last bull markets all time high and comparing it to now


These arguments can be made for any asset of a certain time period

Gold is supposed to be the stuff that holds its value forever, right? It protects you against inflation and stuff. It shouldn't fluctuate and you should be able to buy the same thing in the future. History is the evidence! Well, the last 30 years prove that isn't the case.

nice post. It seems this will happen beyond a reasonable doubt(atleast the spending) unless there is some major social uprising and concern from citizens. The only question is now, how much excess spending.

I think maybe you've got me there. I guess there is a supply demand component of any asset price. I think this makes oil one of the best commodities as an investment because not only does it rise because of inflation but it is also being depleted and we will even hit peak oil some decade. And the amount that is extracted currently is slowing vs the developing nations demand.

You are classifying all gold bugs into one group....obviously there are fluctuations, but over a long enough run it will for the most part.

shoulda done a 40 year graph

not to mention in the late 90s Greenspan openly admitted that they were ready to lend out gold in increasing amounts as the price rises so there is obviously some suppression going on in the gold markets

Except that US went off gold standard less than 40 years ago.

an why does that make a difference? or we could do 20 years? Im just making a point that he is picking 1 specific time frame and that can be done for any asset

I agree with you that it's a selective time frame. But the notion is that gold=money and it retains it's value. But it clearly does not.

well what do you consider money? Money is suppose to be a store of value, nothing on this earth would be a perfect store of value but paper sure as **** isnt even close