A $1 Million Gold Bet: I Sort Of Rise To The Challenge

Again via Barry, apparently some longtime gold bull (gold bug) is willing to bet anyone $1 million that the price of gold will hit $1,650 by 2011 and he says that if you're not willing to bet him on this point, then you should just shut the hell up about calling a market top:

Please communicate to ANY vocal bearish so-called gold expert that I challenge them to put their money on their views.

Any commentator unable to financially meet this challenge should not be opining. If they really knew the gold and currency market they could easily meet the challenge.

Ok, Mr. Jim Sinclar, I have a serious counteroffer. I will put up $5,000 that gold will not hit $1650 by 2011, if you put up $200,000 that it will. If you're so sure that it will, then the long odds shouldn't be of much of a concern. I'm basically offering you free money. Heck, I might even be persuaded by a $50,000 payoff, but we'd have to negotiate.

If you're not willing to take this offer, then I can't help but wonder how confident you are in your prediction. I'm asking you to lay me some odds because I feel that you, as a gold industry expert, must have more knowledge than me, and I need some compensation for that information asymmetry. Only fair, no?

Really, I can't help but wonder why your initial offer to the punditocracy was just a 1-to-1 bet. That doesn't signal much confidence at all. If that were a fair bet, then the odds of gold hitting $1650 would just be 50 percent. Not all that exciting. So, sir, my email address is jnathan -at- gmail -dot- com. Email me, and I'll negotiate with you something in good faith. It'll be fun and I'm sure the bet will get on CNBC. Especially if nobody takes up your offer, then this might be your best opportunity.

*Just note, this idea was partly inspired by Bryan Caplan, who made a similar proposition to someone at a party who claimed 100 percent certainty that Hillary would be the next President, but wouldn't offer generous odds on a bet.

Comments

[gentlejoe]

HOGWASH! A bet is a bet. Either stand up and take it as is or SHUT UP! "Sort of" does cut it. Nor does your wordy 'smoke and mirrors.'

[Joe]

Hey Gentlejoe:

For one thing, I don't qualify to be a counterparty under the original bet, since I can't prove financial viability.

AND, ever heard of a counteroffer?

[steve]

this is your worst post in a long time. Why are you complaining about a supposed bet with 1:1 odds?

[Joe]

Cause 1:1 bets are dumb. They're for kids. They don't generate serious action. They're based on the flawed notion that every situation with two potential outcomes should be priced at 50/50, which is, again, the way kids think. Incidentally, my pre-school teacher also thought thought this way, and even at the time I knew that was wrong.

To make a market, you've gotta give odds.

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