

Gold as the “ultimate bubble” - arman0
http://blogs.reuters.com/great-debate/2010/09/30/gold-as-the-ultimate-bubble/

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tocomment
Is the price anywhere high enough to be a bubble? The current price doesn't
seem that unreasonable to me. Am I mistaken?

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badmash69
If you look at the historical price of Gold, you would notice that it was
relatively flat for most of 80s and 90s. The high in 90s was about $350 per
oz. The gold prices began to appreciate remarkably in this decade at it is at
a high of $1300 per oz. That is a very sharp increase in a relatively short
period of time. That slope is the kind of the "bubble slope" you look out for,

Another point is this : gold can not be consumed. You cant eat it, use it to
build industrial products. Almost Every oz of gold that was ever mined exists
somewhere in the same form. In absence of any specter of shortage of gold, its
sharp increase in value doesn't make any sense.

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tzs
You can eat gold. Search for "edible gold leaf".

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badmash69
.... but you can' digest it. If gold eating was popular culturally, there
would be people mining for gold in sewers.

Gold is also used in products .. and there salvage companies that specialize
in processing this gold.

My point was that when the demand curve shifts , the supply curve can also
shift as mining even "difficult to obtain" gold ( as in above case) becomes
profitable and supply curve will also shift. And the price should stabilize --
but it hasn't yet .. because the demand keep growing .

