Friday, March 13, 2009

The gold rush: Is it too late to jump on the bandwagon?

Paul Farrow and Richard Evans believe there may be a bubble in the gold market. They also question why the gold price seems to be staying so low, despite massive paper money printing going on all around the world?

Obviously, central banks will be having nothing to do with this.

But it is selfishly annoying for us gold bugs that Bell Hops and Taxi Drivers are now buying gold.

So all of you Bell Hops and Taxi Drivers out there, listen to Paul and Richard. Stop buying gold. Start buying stocks again. They're cheap. And quantitative easing will bring about a recovery, and make stockholders billionaires again. Yes, really, it will.

Just leave that gold stuff alone.


not an economist said...

It may not be too late.

In a recent interview Rogers made reference to the possible intention of the IMF to sell off its gold supplies. He said they were quite keen to do so and that the IMF was the world's biggest holder of gold so the impact of this move on the price of gold would be significant.

Rogers went on to to say that that if this happened the price of gold may temporarily dip but ultimately it would rise again as it would be viewed as the safest haven against world inflation.

This was an interview Jim did on Bloomberg just the other day. I think it was the one you posted but I can't be sure as it may be one I found elsewhere. If I find it again I will post the link if you want.

Jack Maturin said...

If you can post the link, that would be great.

not an economist said...


This is the video:

Listen to whole thing but the gold bit statrts at around 5min 20 secs.

He mentions the IMF bit (i.e., selling their gold stocks and selling them) but he doesn't actually say about gold being an inflation hedge (if thats the term). I must have got confused with Schiff on that last bit.

not an economist said...

Schiff talks about this runmour about the IMF selling its gold stock here:

.... he doesn't think this will significantly affect the price of gold though.

Jack Maturin said...

Nice one, not an economist.

Matt said...

jim has mentioned it quite a few times but he does repeat talking points in almost every interview.

rumours of the imf selling their gold have sprung up before but its never happened. dubious whether it will happen this time but most goldbugs, schiff included, seem to think it won't affect prices much because china will gobble it all up in an instant.

china has stated they would be looking to up their current reserves of approx 600 tons to 4000 tons.

will be interesting to see how it plays out...