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As Good As Gold
Sometimes I wonder if I'm just smarter than the average bear. Or smarter than the end of a bull market, as the case may be.
Not too long ago, I had the opportunity to buy a downtown loft for a damn good price... but it was juuuuust slightly out of my reach.
Actually, I could afford it perfectly except for one thing: common sense told me interest rates would go up. Unless I had a way to equally grow my income with the level that interest rates would rise, I knew I'd be screwed. And so, I passed.
Now we're seeing the whole sub-prime mortgage collapse and people nationwide are losing their homes.
"Hang on" Rob says to himself. "Why didn't those people do what I did and realize they wouldn't be able to afford the payments when higher rates kicked in?"
Yeah yeah, it's easy to point these things out after the fact, right? Well here we go again - but this time, it's gold.
In January 1980, the price of gold was $847 an ounce. By June of '82, it fell to below $300. Today, the price of gold passed $1,000 an ounce and people are buying it as an investment. And this too will crash. And people will despair, saying "wow, I didn't see that coming."
...please.
I have no idea why I pay attention to these things, but I do. Time will tell if I was right.
::::: | Filed under: thoughts
::::: | Posted Thursday, Mar 13 2008 at 10:13 PM
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