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GOLD bubble

Is gold overvalued? i think YES!!

pRE CONDITIONS FOR A BUBBLE:

  • Easy credit conditions
  • A significant trend-breaking event
  • The lack of plausible valuation measures
  • An appealing story

Lending is still weak but crucially interest rates are low. That helps given that gold has no yield; In effect, the opportunity cost of holding gold has disappeared

Gold has no valuation issues (no yield or earnings); Since people hold it as a store of value, it can be worth whatever they want it to be worth.

And it has a plausible backstory; Spendthrift governments are monetising their deficits like the Weimar Republic before them

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bubble, gold, valuation

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