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First of all, bubbles always occur when there appears to be a very good rational for the rise. Secondly bubbles are not generally apparent as bubbles until after they burst.

Likewise, the rise in gold is based on what appears to be very sound reasoning -- namely that the unsustainable level of debt obligations by the US and other western democracies will lead to devaluation of the currencies and gold provides a solid hedge against that.

Admittedly the US dollar deserves a kick in the butt. But has it gone too far? In 2000 the price of gold was $279 per once. Fast-forward to 2010 and it is now $1296 per once. That means based purely on gold prices, we've devalued the US dollar to 21 cents in 10 years!
 

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Maybe, maybe not. I'm riding the trend for now. My sell point is about 10% below current levels, but that is just around where gold was two months ago.
 

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Hold on a second, wasn't the gold bubble supposed to burst at $1200?, and again at $1250?

Despite being a gold bug, I skimmed some of the profits after the massive run this week, mainly to rebalance to my original allocation. I've been up as high as 25% of the portfolio in gold mining stock funds after the gains, but I'll likely readjust down to 15% by year's end (and add 5% in "SLV" or an equivalent). I wish I had the guts to "set it an forget it" but who knows where this is going :eek:

Anyone else a believer in the dow/gold ratio? I hope for the sake of the entire world economy that the meeting point is at a dow of 10,000 and not 4,000:

 

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Gold has just broken out to the upside meaning we could go as high as $1500 from here and then have a big correction. Apparently upside breakouts are hard to bet against because it keeps going up higher and longer then anyone can imagine. For me personally I have my precious metals fund that owns it all and I will just hold that for now.

On another note about breakouts have a look at this http://www.safehaven.com/article/18326/trend-channel-analysis-suggest-stocks-are-about-to-fall. If the rally in the S&P fails here then watch out but if it breaks above according to this then this will be an upside breakout. Maybe the Fed will QE this point and break it out.
 

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What is more interesting is where is the price of silver going?? GLD is going up but slowly and steadily. Regardless of whether it is a bubble or not, you have to have some of it to keep your portfolio diversified.
 

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Spidey the US dollar is held in great amounts around the world and the US needs to print tons of it to just pay the deficit. So what is the US dollar really worth?

I am sure the nations that are resisting purchasing more US debt like China is finding out what the US dollar could really look like. If the US dollar tanks enough how will the Fed deal with the box they put themselves in, meaning print money to QE the long bonds and face high inflation or not QE and keep the dollar stable to increasing with lots of job losses.

Right now everyone figures that commodities, stocks and precious metals are a can't lose situation because bad economy more QE, good economy no QE how can you lose. Something smells rotten in Denmark I would think.
 
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