Economics Questions

Re: Questions on Gold and it's 6-month price

Smiling Dave — Mon, 07 Feb 2011 03:36:23 GMT

fakename:

Hi everyone, I just want to ask those who are better at financial news -do you think that gold will become cheaper in 6 months...

Unlikely that anything will become cheaper. The money is being printed at breakneck speed

is it a "bubble" as I heard?

A bubble is when people buy gold not to hold on to it, but to sell to the next guy. Of course, it is impossible to read people's minds, but in the old days bubbles used to be called "manias". Do you sense any mania for gold? Do all your friends talk about gold? Is the TV full of ads and experts telling you how great gold is?

Secondly, isn't gold primarily useful as a way to save the money you made from inflation and not as a way to make money like with stocks?

Yes.

I'm skeptical about the bubble idea (if anything stocks are where the bubbles form) but what about your imput?

Manias can form anywhere. My guess is that enough people remember being burned by stocks that they won't be lemmings for stocks so quickly.

Thanks!

Re: Questions on Gold and it's 6-month price

Esuric — Mon, 07 Feb 2011 02:52:54 GMT

There may be a short-term correction, and it could potentially be dramatic, but I think that gold is a great long-term investment. Ben Bernanke literally announced that he will keep short-term interest rates low until the unemployment rate falls (which, according to him, will take years). Additionally, we're probably going to see multiple rounds of QE, and another "stimulus package." Honestly, though, I would buy silver.

By the way, I'm not an expert.

Questions on Gold and it's 6-month price

fakename — Mon, 07 Feb 2011 02:33:57 GMT

Hi everyone, I just want to ask those who are better at financial news -do you think that gold will become cheaper in 6 months...is it a "bubble" as I heard?

Secondly, isn't gold primarily useful as a way to save the money you made from inflation and not as a way to make money like with stocks?

I'm skeptical about the bubble idea (if anything stocks are where the bubbles form) but what about your imput?

Thanks!