Went long gold today

Brave soul. Monday the prospects for a Euro bailout were dim, and today things are looking up. If the pigs ultimately fail, should be interesting to see how far PMs get taken down.

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Went long on gold today

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no need to say "on"

Nah, just friendly lingo advice.

No I snort Platinum. Gold gets injected :) But yes, the proper terminology does not have on in it.

What signs are those? The bottom could drop out of anything (stocks, mutual fund, etc) at any time.

2,000 an oz. seems inevitable doesn't it?

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what is it that actually causes gold to be valuable?

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I don't think of gold as a shiny chunk of metal that I'll be hoarding in case of anarchy breaking out.

I think of it as a currency. Other currencies are in a race to the bottom so massive amounts of debt can be monetized. One can deny that that is happening if they want, but shortly the ECB will be forced to print money to prevent a banking crisis and the US will have to follow suit to keep the dollar from skyrocketing against the Euro.

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Myself and finance PhDs that I have spoken to do not see where this enormous amount of value the market seems to think gold has comes from.

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Its valuable the same reason a stock sold on the market is valuable, as more people buy it, price goes up. The trick is to have sold yours before everyone else starts to sell as only so many people can fit through a door at one time.

at the idea of gold being a bubble.

About yesterday...

IIRC, in early Sept of 2008, we had a 1000 point drop in the Dow in about 2 weeks. On 18 Sept, 2008, the Fed announced an increase in the currency swap lines with Europe and the Swiss, and also new lines with BOJ, Canadian Central Bank and BOE.

The ensuing result was a huge rally in the Dow that lasted (roughly) a couple of weeks.

They just buying time. Next up, the FED will be buying Euro sovereign bonds. That's where it gets very dicey politically.

Yesterday just reeks of desperation.

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IIRC, in early Sept of 2008, we had a 1000 point drop in the Dow in about 2 weeks. On 18 Sept, 2008, the Fed announced an increase in the currency swap lines with Europe and the Swiss, and also new lines with BOJ, Canadian Central Bank and BOE.

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This was not the only thing that happened from a liquidity stand point in the last week.

1. IMF liquidity arrangements made last Tuesday.

2. A FED vice chair releasing a statement containing the quote, "The Federal Reserve continues to provide highly accommodative monetary conditions to foster a stronger economic recovery in a context of price stability.

3. The Euro EFSF plan that will increase a fund to lend to/or buy soverign debt to approximately 1 Trillion dollars.

4. China dropped the reserve requirements for it's banks for the first time since 2008.

Desperation? Maybe, but I'd call it a coordinated plan by central banks.

Now does all of this mean for sure that gold/commodities will go up? I don't know, and am willing to admit I don't know. I've placed my bet so to speak with stops in place and we shall see.