We are not permabears who sell or thrive on bad news, although the market falls faster than it rises.

We profit by being realists.

And now the gold Point and Figure Chart targets $1300,

having just flipped up from $930.

What’s not to love about gold?

As we have repeatedly made the point here, a sentimental fool and their money may be soon parted.

Judging by the number of people on many blogs who say anyone not leaping into gold or holding it forever, including Mr Buffett, Mr Gates and the International Monetary Fund, is a fool, we have a pandemic of gold fever, if not H1N1.

We suffer silver fever too, as more and more people are saying silver will outperform gold from here.

One of their arguments against gold or silver being in a blow-off mania top is that very few people own either.

Well, that was true in 1980 too, when they topped out.

People developed elaborate rationalizations. They range from gold and silver are real money, the Chinese, French and Indians are smarter than Americans, inflation adjusted prices have not recovered, to peak production to tungsten gold at the Fed and Treasury Mints and Vaults about to be audited, to impending exchange defaults and running the banks.

Gold and silver fever now seem more religion than fact.

For fact, we post our friend Paolo’s free peek at his quantitative charts. They are not cheap either. They are well worth the price:

http://econocasts.com/

We heard similar expansive claims in 1980 before the Hunts lost their billions on silver and gold entered a 20-year bear market.

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This entry was posted on Sunday, February 28th, 2010 at 5:38 pm and is filed under Capital Preservation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.