Fool's gold?

By paranoid on Mon, Mar 13, 2017 - 11:47am

I read this on one of the forms I follow what I thought it was an interesting Counterpoint, any thoughts?

"Here’s a chart you might have seen before though.

Its gold inflation adjusted (deflated) back to 1913 and what it tells you is not how much purchasing power the dollar has lost but rather how stupidly overpriced gold has been for decades.

Better yet, it demonstrates a nearly perfect double top in inflation adjusted terms that would otherwise elude the observer who was relying on nominal prices. And what this is telling us is that gold has a long way to fall and secondly that we have already started down the backside of a multi-decade correction back to reality.

Take note that the second peak (which is the 2011 top) is left translated. That is a clear warning the next peak will come in as a lower-low many years from now. In other words, we will likely NEVER see gold at previous highs again in our lifetimes.

Those two parabolic rises that happened in 1981 and 2011 are the exceptions during more than a century of pricing. They are not the rule. Gold bugs had better start to learn this now or they will be seriously disappointed in coming years as gold fails to come through with the rich valuations they imagine are in store for them.

This is just one of a hundred reasons I cannot get excited about gold anymore. Its a fools metal and best traded short term for profit on swings. But buy and hold? Give me a bloody break! If I want to store something of lasting value I’ll stick with vintage wines and old Scotch. Now those really do track inflation well.

At least I have something I can enjoy with friends and its always stored close by in the cellar. "

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