Home » 2010 » October » 19

Daily Archives: October 19, 2010

Gold bubble forming

I have been bullish on gold since I expected the Fed could never get the timing of exit (from the current easy monetary policy) right.

With another round of money-printing or QE2 from the Fed, gold price has been soaring in recent weeks.  FT compares the surge of gold to the past asset bubbles.  The crude comparison seems to indicate that gold is now in its early bubble-forming stage.

(click on the graph to play)

Like every asset bubble, the time of reckoning will eventually come. It’s fool’s game trying to get the timing right, however.

Now it has become more clear that the Fed’s super easy monetary policy is in the process of creating at least two bubbles in the world – first the gold, second is the bubble in emerging markets – remind me of Latin America crisis in 1990s.