Gold Bubble: Profiting From Gold's Impending Collapse

Preface vii

Disclaimer xiii

CHAPTER 1 Why Gold? 1

Understanding Gold’s Surge 1

Why the ‘‘Gold Bugs’’ Are Wrong 4

CHAPTER 2 Bubble Enablers and Precipitating Factors 5

Removal of the Fixed Price for Gold in 1968 5

Poor Market Performance and Capital Diversion 6

Uncertainty 7

Currency Troubles 8

Emerging Market Growth and Demand 8

Hard to Value 9

Introduction of Gold ETFs 9

Former UK Prime Minister May Be Responsible for Gold Bubble 9

Illusion of Safety 13

Conclusion 13

CHAPTER 3 Signs of a Gold Bubble 15

Parabolic Price Increases 15

Massive Publicity 21

Overspeculation 29

Extreme Expectations 45

Conclusion 56

CHAPTER 4 Gold Takes On . . . 59

Deflation 59

Is Gold a Safe Haven During Recessions? 60

Gold versus Various Asset Classes: Ratio Analysis 63

Conclusion 65

CHAPTER 5 Price Analysis and Forecasts 67

Gold Bubble Anatomy: Is a Parabolic Spike Coming? 67

Gold’s Place in History: Elliott Waves 70

Price Target for Gold Collapse 77

Fibonacci Time Relationships 79

Seasonality 81

Conclusion 83

CHAPTER 6 What Does Gold Depend On? 85

Herd Mentality in the Stock Market 86

Are We Headed for Another Great Depression? 88

Market Cycle Predicts Recession 97

The Dangers of ETFs 104

What about the Dollar? 117

Emerging Market Troubles 123

Middle East Upheaval 136

European Crisis 139

Conclusion 141

CHAPTER 7 Calling the Top: Signs of Reversal 143

Lagging Mining Stocks Signal Reversals in Gold and Silver Prices 143

Bernanke and Buffett ‘‘Puzzled by Gold Rally’’ 149

Dollar Strength and Market Weakness 150

Declining Momentum 151

Big Guys Selling: ‘‘Smart’’ Money Leads the Way 152

Is the Commodity Run-Up about to Reverse Course? 154

Has the Bubble Popped? 165

CHAPTER 8 Ways to Profit from the Collapse of the Gold Bubble 167

Short Gold 167

Short Gold Miners 168

Options Strategies 168

Short Rare-Earths 169

Betting on History: A Gold-Platinum Pair Trade 170

Forget Gold, Buy Diamonds 171

Buy Stocks Instead 176

Buy Physical Property, or Invest in Housing Stocks? 177

Conclusion 186

CHAPTER 9 Other Investment Land Mines to Avoid 187

‘‘Cloud Nine’’ Computing: Sign of a Renewed Technology Bubble? 187

Betting against Facebook 193

Is IPO Mania Warning of a Tech Bubble 2.0? 206

Netflix: Setting Up for Disaster 213

Conclusion 231

Notes 235

About the Author 245

Index 247