Gold Bubble

Gold is near and dear to people’s hearts.  My Grandmother was a “goldbug” and followed gold mining stocks daily.  Gold even has “smart” investors like Glenn Beck promoting it.

There is a gold rush going on right here in front of us.  This is a sure danger sign that we are in bubble territory.

Notice the commercials for buying gold?  Notice how gold has been one of the best performing asset classes over the last 4 weeks?  I’d say we are building a gold “climax run”.   These always end badly.  US realestate went on a climax run in 2006, with prices appreciating 2% per month.  We all know what happened afterwards.

Just when it looks like you can’t lose money on something - watch out below.

Look how oil ran up to $150 in mid- 2008 only to see the price get crushed back to $35 in a few short months.

Once people start running for the exits on gold - watch out below!  Prepare to short it.