Societe Generale uses the following chart to support their uber-bullish case for gold. By their metrics, apparently gold has only been fairly valued in 2 out of the last 40 years. And that was during a short-lived spike.
Thus according to their valuation, markets have been completely wrong for 38 out of 40 years. Which makes one wonder what their definition of ‘wrong’ is. It seems pretty rich to expect markets to suddenly become sustainably ‘right’ should they historically have always been ‘wrong.’
Markets are frequently mis-priced, but if you find they always are then you need to re-check your assumptions.
(Via the Big Picture and an astute BP)