-- Posted Wednesday, 22 December 2010 | Digg This Article | | Source: GoldSeek.com
One of the clearest reasons that ArabianMoney can offer for investment in gold is that the price has been going up for a decade but still shows no sign of the classic spike or mania stage. For almost always the top of a price trend is marked by a spike. We warned in the last issue of the ArabianMoney newsletter that the silver price since August did have the appearance of a spike. However, there has been nothing similar in the gold price. George Soros Earlier this year George Soros raised a few eyebrows with his comment that ‘The ultimate asset bubble is gold’. We pointed out at the time that Soros was talking about the future and not the present, although some still misunderstood this comment (click here). Last month he told the Canadian International Council in Toronto: ‘It’s all a question of where are you in that bubble… The current conditions of actual deflationary pressures and fear of inflation is pretty ideal for gold to rise’. As our friends at the Five Minute Forecast note today: ‘Many of Soros’ fellow hedgies — John Paulson, David Einhorn, Paul Tudor Jones, just off the top of our heads — have piled into gold’. But they are still a small minority in the investment community. Bond flow inflows of $240 billion this year dwarf the $60 billion held in gold ETFs, and only 40 per cent of gold production is allocated to investment. Mania stage How long will it be before the man-in-the-street actually gets gold? It is a slow but inexorable process. The installation of gold ATMs around the world is a sign but we need to see a network of a thousand gold vending machines not a few novelty installations. But the big changes are already happening in financial markets with bond prices in retreat and interest rates rising. Soros is right the fear of inflation is there, and the reality for many assets is going to be falling prices or deflation. After all rising interest rates make ownership more expensive and push asset prices down. For the real mania you have to imagine the $240 billion allocated to bonds this year by investors trying to squeeze into a $60 billion gold ETF market. That is when you will see the real gold price spike and silver will most likely shoot even higher.
-- Posted Wednesday, 22 December 2010 | Digg This Article | Source: GoldSeek.com
Previous Articles by Peter Cooper
About Peter Cooper:
Oxford University educated financial journalist Peter Cooper found himself made redundant by Emap plc in London in the mid-1990s and decided to rebuild his career in Dubai as launch editor of the pioneering magazine Gulf Business. He returned briefly to London in
1999 to complete his first book, a history of the Bovis construction group.
Then in 2000 he went back to Dubai to become an Internet entrepreneur, just as the dot-com market crashed. But he stumbled across the opportunity to become a partner in www.ameinfo.com, which later became the Middle East's leading English language business news website.
Over the course of the next seven years he had a ringside seat as editor-in-chief writing about the remarkable transformation of Dubai into a global business and financial hub city. At the same time www.ameinfo.com prospered and was sold in 2006 to Emap plc for $27 million, completing the career circle back to where it began a decade earlier.
He remains a lively commentator and columnist as a freelance journalist based in Dubai and travels extensively each summer with his wife Svetlana. His financial blog www.arabianmoney.net is attracting increasing attention with its focus on investment in gold and silver as a means of prospering during a time of great consumer price inflation and asset price deflation.
Order my book online from this link
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