Google stock overpriced? Nahhh…
Concern is spreading that Google’s stock price breaking $700 per share yesterday is ominous.
Since mid-September Google has added 30% to its stock price and an additional $53 billion to its market capitalization — or about one and a quarter Yahoo!s.
It’s amusing to see people point to that as an example of “mania” for a particular stock. While I think it’s indeed bad news, the thing is that people saying this sort of stuff get it precisely backwards. What these analysts overlook is that 30% Google stock price climb since mid-September roughly tracks the increase in the price of oil and gold while the dollar has plunged to a record low against the euro and stocks (generally) are in freefall.
Google stock is only “soaring” because it’s standing still while the dollar crashes — hard. It’s acting to preserve value — like any other trustworthy commodity. This while the US Federal Reserve just keeps inflating away, indirectly stealing the purchasing power of the productive class in the name of financing ongoing war and other government spending.
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