Friday, December 17, 2010

Yet Another Sign of a Gold Bubble: A Gold Dispensing ATM

Yes, some idiot put in an ATM machine that dispenses gold in Florida.

Shoppers who are looking for something sparkly to put under the Christmas tree can skip the jewelry and go straight to the source: an ATM that dispenses shiny 24-carat gold bars and coins.

A German company installed the machine Friday at an upscale mall in Boca Raton, a South Florida paradise of palm trees, pink buildings and wealthy retirees.

I can kind of see such a thing in Abu Dhabi where people like to flush money down the toilet but now it is happening in the US in a retirement capital like Boca Raton. I hope these retirees are diversifying away from gold because there are more and more signs that there is a bubble.

The thing that pushed me over the top were these kiosks at Ala Moana that were willing to buy gold from you. There is nothing that says bubble more than trying to buy something from someone at the mall. That means the natural market is tapped so you are trying to solicit from whatever market you have left. Does this Gold Kiosk company actually think that people go "I'll think I'll have a Cinnabon and then sell some gold bullion I have laying around."

Kiosks and a push toward the lower end market is the exact bubble sign that we got before the debt bubble burst. I mean they were shoveling out loan refi offers to everyone in mailing distance no matter if they should be buying a house or not. Things got idiotic right before the bubble burst and I think it is happening in gold as well.

So as a consequence I am now short gold using the PowerShares DB Gold Double Short ETN. I mean there is no way the price of gold is sustainable when people are rolling out Gold spitting ATMs and trying to buy the stuff from you in front of the As Seen on TV Store. Now the last sign will be someone saying gold will go to $10,000 a ounce or say "this time the market for gold is different" or other nonsense.

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