It has occurred to me that financial time series are far from simple random walks (even with fat tails). Financial markets exhibit cycles. My focus is on stocks, bonds, and inflation (gold). Two cycles are particularly interesting:
How high can gold price be? My assessment is the naive $5,000-$10,000 per ounce. One day in the next few years, you will see SPDR Gold ETF being the largest ETF with $500 billion cap. Then you know gold's time is up.
A lot of people compare the history of gold and Dow in the last 110 years. They often concluded that gold as an investment is far inferior to stocks. This conclusion is in general correct if your investment thesis is a century of buy-and-hold. But most people (including professionals) can rarely hold an investment for more than 3-5 years. Since gold is the last resort safe haven of money, it exhibits very long (and simple) cycles. From 1972 to 1980, gold rose from $43 to above $600 (Peak at $843 on 01/21/1980). This x15 times appreciation is not any inferior than the bull market of Dow from 1950 to 1966 or from 1980 to 2000.
But gold stayed around $400 in the 80's and 90's and dropped to $250 in 2001. Then it took off the decenial rally to above $1000 in 2010. Since gold has broken its previous high of $800 in 1980, it is going to move to the "next level". By all means, it indicates the range of $5,000-$10,000 is in the reach, which may take another 6-10 years. Once gold reaches the high end of this level, the U.S. government will be in good shape again.