OTOH its probably a good time to start to think about shorting gold.

I don't know, the stock market is still acting flakey. People may still jump into gold for a while because they don't have anyplace else to go. The problem with bubbles is trying to predict the end.

Edit: I have a friend who is convinced that the prices will really start to take off just before the bubble bursts, that's when he intends to sell his gold.

It's like any piece of art, or even in another thread, what a "classic" car is worth. Who decides what it's worth ? The guy with the biggest piggy bank willing to pay the most for it. As someone posted several posts back, once someone pulls out major league, it will be back to $200 an ounce..

On Friday Bernanke in a speech in Boston made clear that at the Nov.3rd Federal Reserve Bank board of governors meeting will announce a second QE (qualitative easing) program to buy US Treasury notes, the suggestion is that it will be in the One Trillion Dollar range. The Fed simply prints the paper and then uses that ‘Magic” money to purchase the US debt essentially diluting the value of every dollar already in existence.

The spot price of gold or for that matter any tangible commodity is nothing more that a reflection of the value of a currency in both real terms (compared to other currencies) and the confidence in that currency.

Dollars are worth less because there are more of them. The effect on the economy will be significant because we import so much energy, the amount of dollars needed to purchase a barrel of oil will rise as the dollar further weakens!

Conversely the stock market will “appear” to do better as more, less valuable dollars are available for speculation, but of course we all know by now the value of the trading on the market floor is no indication of the actual intrinsic hard asset value of the stock traded.

This next move will only devalue the Dollar further and further erode confidence in the Dollar.

That’s why the position of the Dollar as the world reserve currency is in question and threatened and it’s weak against other currencies.

Gold can never be created/ mined fast enough to outpace currency manipulation and instability of currencies only increase the demand for gold. Glenn Beck might not be a smart as Barrack Obama but he’s a lot wealthier in either dollars, gold, or real estate!!!

When the gold bubble bursts, it won't be because dollars suddenly became more valuable. Unless of course, your definition of the value of a dollar is how much gold it can buy, because in that case you are essentially begging the question.

I am not fascinated by precious metals. I can't eat them, they don't power my car, and I can't live in them. How much it costs to keep going is a better gauge of currency buying power.

Sure, the dollar is depressed right now. But this depression is not proportional to the increase in the price of gold.

Gee, I dunno. I know people say it is and have all these numbers to back it up, but a dozen eggs is still the same as it was 3 years ago before the bottom fell out completely, so is bread. Gas is cheaper. Used cars cost less, new ones roughly the same for more stuff than before (standard power everything). Houses cost less. What's gone up in cost?

I paid what I feel is a VERY reasonable price on a new laptop, washing machine, over-stove microwave, dishwasher, and fridge in the last year alone; and I am looking for an LCD TV for my bedroom since they cost about half what they did 3 years ago.

The dollar is weak compared to other currencies, which is the only measurement that matters. Of course, that has very little to do with the current price of gold (which is being driven by speculation, i.e., it's a bubble).

It's a buyer's bonanza for those with money, a steady job, good credit, - or all three.

Those with jobs should be replacing big ticket items that they can see need to be replaced. Homes, cars, and durable goods. Rental real estate too. Sales abound.

It's also a time to load-up on stocks. Stocks are very attractive, all things considered. They won't be this attractive forever.

That's all I think I know for sure.