There are few topics with respect to global markets that are more intriguing than that of asset class bubbles. As a social scientist, it is remarkable to see how humans can become so "irrationally exuberant" for an investment, even though the phenomenon of bubbles is well known and well studied.
In my opinion, there is no bigger bubble currently than the one that has developed in the gold market. Gold-bugs can rationalize this 650% move about 100 different ways. But from your humble scribe's vantage, I see this only ending in tears. When asset price charts go vertical, it is just a matter of time before they collapse under their own weight.
In my opinion, there is no bigger bubble currently than the one that has developed in the gold market. Gold-bugs can rationalize this 650% move about 100 different ways. But from your humble scribe's vantage, I see this only ending in tears. When asset price charts go vertical, it is just a matter of time before they collapse under their own weight.
If I were to take the short side of this trade based on my pessimism, I would do so using at-the-money 3-year LEAP put options on the gold ETF (ticker-GLD). Using futures or trading spot gold (through a currency broker) for the short trade risks getting creamed by the golden-tinged craziness.
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