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<p>[QUOTE=&quot;medoraman, post: 983762, member: 26302&quot;]Nice way to fit a graph beginning at a historically adjusted low market. Should I fit the market returns starting in the early spring of 2008 while we are at it? Or start a housing graph at about the same time to &quot;prove&quot; housing will eventually cost $0?</p><p><br /></p><p>Sorry, pet peeve of mine. To graph any type of performance of any financial instrument the timeline is KEY. Starting stocks return in 1975 is just as bad, since they were coming off of 1973 and 1974 historically horrible returns. We have had these discussions before, and I believe the only fair way is to compare 1924 to date returns of all financial instruments, or 1900 to date. Short time frames is why markets overreact and people think the party will continue &quot;forever&quot;. Same as the housing bubble, same as tech stocks, same as defense stocks, same as 1979 PM&#039;s, same as holland tulip bulbs. All bubbles have many people saying, &quot;its different this time&quot;, its ALWAYS different this time..............</p><p><br /></p><p>I am not saying PM are in a bubble, but to suggest they will continue to see gains at the same rate as they did coming off of historic lows is simply foolish in my opinion. Can they keep current prices? Sure. Will they go up 400% in ten years from current prices? I do not see how. A lot of current demand is from Asia, and I have many friends in China, India, Thailand, etc who currently cannot afford gold anymore. The demand for gold is not inelastic, much of the current demand is extremely elastic, as gold is not NEEDED by human beings, it is mostly a luxury item or a perceived store of value. Many of them, including professional gold dealers, are on the sideline anxiously looking for any type of correction. In Asia, most gold is extremely sellable. Most of their gold investment is 24 carat jewelry which can and is sold any time money is needed at spot price. My gold dealer friends have even arranged extra loan limits and expedited wholesaling contacts in case this happens.</p><p><br /></p><p>You say a financial advisor would not advocate 40% in PM. Well, hate to tell you, but many such advisors in Asia are currently advocating 100% gold and have been for a few years. US demand is not a large contributor to overall demand, so for you to make the case its not oversold in the US so therefor cannot be oversold it a little narrow sighted.</p><p><br /></p><p>Sorry, end of rant, just had to get that off my chest.[/QUOTE]</p><p><br /></p>

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