Thursday, August 18, 2011

"The gold price will never fall!" How can people believe that?

‎"[Gold] looks overextended, the MACD is high enough to give Arnold the Giant a haircut, and the RSI is way overbought. Still, as recent history has shown us, the gold price can remain overbought for a long time."

That is a gold bug talking... The actual commodity is overbought... people are trading in futures, ETNs, ETFs and these things are starting to take on the same character as the mortgage crises...

The similarity:
People see others making a profit - they too want to make a profit but houses are 250,000 +... Invest in the securitized obligations! Nothing could go wrong... The house price will never go down!

People see others making a profit - they too want to make a profit but Gold is already 1800+ per ounce... so how to "Break in" to the market? Well, but a share in a mine or an ETF... No need to actually hold specie... just invest in shares... Nothing could go wrong... the gold price will never go down!

Wednesday, August 17, 2011

Economics and the Heisenberg uncertainty principle

Much more to come from this, but, generally, the Heisenberg uncertainty principle states that one cannot measure both the instant position and speed of a particle as once you measure one, you affect the other qua your measurement.

Translating this to economics [draft 1]:

One cannot know both the instant state and the future behavior of a given market as once the state is acquired and that data released to the population [of the traders in the market] the data will modify the future behavior.

This is a very rough first draft of this theory - but I think it holds.