The relationship between the business media and bubbles is an interesting thing.Take oil last year, for example. I followed the price of oil each day as it climbed higher and higher. The really interesting thing about that was how the business media would simply invent a new story to support the new higher price of oil.
These stories ranged from worker strikes, bombings, OPEC talks, threats from North Korea or Iran, changes in the dollar, drilling delays, even maintenance shutdowns. It was madness. Oil moves became an obsession for the media. CNBC even ran an oil ticker on the lower right side of the screen all day. Yeah, that’s bizarre.
I use to make up my own headlines, “Saudi Farts, Oil up $4”. And I would have been right, too. Why not? It’s not like there was any truth to any of these stories.
On any given day, each business news organization would print their own reason for the move. Bloomberg would blame the weak dollar, ROB would blame a looming Nigerian strike, and CNBC would blame Kim Jong-il. Well, he did invent oil, after all. Right?
But the fact of the matter is that oil was up because it was a bubble. And what usually happens right before a bubble pops, is a last surge (super-spike of buyers) at the end. It can take your breath away. This is what happened with oil, for example. There was NO reason for oil to spike in 2008. None. Everything was already melting down, the economy was tanking, and yet nobody could believe what was happening in the pits. Rampant speculation in oil.
I think gold is poised for its last spike. I don’t know when… maybe this fall, maybe next spring but it could possibly double to $2000/oz. Then, after a few months, it will begin to crash all the way back to $300.
Why do I say this? Well, because the media are back up to their old tricks. Gold is front-page news again and that’s not right. The stories being printed about inflation and end-of-the-world scenarios don’t make any sense. The journalists are always justifying it by quoting some gold bug saying how there is “real buying” out there (as oppose to what?). And the number of commercials out there for buying gold is up 10 times! People holding gold only make money if they can convince other people to buy it as well. That makes their holdings more valuable.
Once it super-spikes, the party will be over. And it’s the regular Joe, with half his wealth in gold who will be cleaning up.
Folks, this is Johnny Newsmaker signing off. We now return you to your regularly scheduled programming… "Gold! Gold! Gold!" only on Ranting-TV…
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