Chart: What Gold 'Bubble'?

[...] This post was mentioned on Twitter by tototrade, historysquared. historysquared said: Gold overbought short term (95 sentiment reading), but yet to go parabolic: $GLD vs internet bubble stocks http://stk.ly/d3cwLJ [...]

Sure it doesnt match the Nasdaq bubble.

So your assuming the definition of a bubble is the tech bubble and only that of the tech bubble, and thus, the relative magnitude of the tech bubble?

Seriouse logical fallacy.

People use the term ‘bubble’ interchangeably with ‘overpriced’ and that’s an error. If you’re going to call gold a ‘bubble’ then its only fair to compare it against bubbles of the past. I used the Nasdaq bubble, since it has the characteristics of a classic bubble.

Nasdaq, Nikkei, DJIA of the 1920s, Tulip bubble, South Sea bubble, Railway bubble…take your pick.

The point is bubbles experience parabolic phases where mania, unrealistic expectations and speculative excesses take over. Gold (overpriced or not) has not reached this point. And it doesn’t necessarily have to in order to fall in price.

This is simply an exercise in getting people to understand the definition of a bubble.

Here’s a graph of the Nikkei bubble

You need to update your chart now as gold now has reached the bubble status.

I’ll update it soon…