The Gold Economy

Earlier this month I featured a chart series on The Shape of Market Bubbles, which looked at four widely acknowledged bubbles in market history. Here is an update through the latest market close. But this time I’ve added a fifth asset, Gold, with the latest high used as the point of peak alignment. Would such an overlay support the suspicion that Gold is getting into bubble territory?

First let’s look at a chart of Gold over the past 30 years.

Now let’s review our previous bubble series. The first chart centers the Shanghai Composite. The peak is the

One of the hardest things to do as an investor is to think through investments without presuming anything. The data will tell a story and paint a picture for you that you can then interpret. Most people shun this obvious approach to investing and instead choose to invert the process by allowing their assumptions to cloud their analysis. This is simply not a sophisticated approach to investing.

I wrote on May 1st, 2008 an article whose title was Commodity Conundrum Solved: The Hidden Parameter in Interest Rates.

I would like to point out here a special case which I have overseen. It is the case of deflation. The spread between long term yields and short-term yields is replaced by the spread between long-term yields and inflation. That means that given the current volatility of interest rates an expected deflation of more than 0.64% and the present Yields on US Treasury Bonds of 3.96% (against a normal spread of 4.60%) would bring back the price of

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