May 27, 2010, in Commodities, Our Culture, by Tim

In case you missed this from the other day, the Wall Street Journal is running a series of stories about gold as an investment and the first installment carried this graphic showing the current move up to be just a baby as compared to the last two asset bubbles.

But if gold is a bubble, here’s why it may not be over—and, indeed, may it may be about to go vertical.

First, the recent rise is deceptive. Yes, gold has risen from around $250 an ounce to $1,200. But that rise started at very depressed levels.
…
Second, before we assume the gold bubble has hit its peak, let’s see how it compares with the last two bubbles—the tech mania of the 1990s and the housing bubble that peaked in 2005-06.

The chart is below, and it’s both an eye-opener and a spine-tingler.

It compares the rise in gold today with the rise of the Nasdaq in the 1990s and the Dow Jones index of home-building stocks in the 10 years leading up to 2005-06.

They look uncannily similar to me.