How Media Coverage Shows You There is No Gold Bubble
We’ve discussed the evidence against a bubble in gold before, and now Tim Iacono points out that there’s another reason to be skeptical. Whereas media mentions of other bubbles – like tech stocks, housing, and credit — have seemed to surge in popularity in the news at particular points in time, the concept of a “gold bubble” has been around since at least the early ‘70s… and seems to still have sticking power today.
From The Mess That Greenspan Made:
“The funny thing is, according to this data at Google news, the media has been calling gold a bubble for, not only years now, but decades…
“The news coverage that you see above for the ‘gold bubble’ looks nothing like the other three [bubbles in stock, housing, and credit], rising gradually since 1970, the early-1980s gold price peak almost imperceptible in the graphic. The more you think about it, the more clear it becomes that, William Buiter’s recent commentary may be on the mark – gold may be in a six thousand year bubble and may have another six thousand years to go before it bursts.”
It probably doesn’t make sense to invest with a six thousand year time horizon, but this argument against a bubble offers some interesting support for gold’s price level. See the charts mentioned above and full coverage of the long gold bubble at The Mess That Greenspan Made.
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