Wednesday, March 30, 2011

Bubbles Pop

Bubbles pop. At least that's what they do when they get too big for the pressure inside verses the thinness of it's skin.

Many say gold and silver are also in bubbles. Their skins are too thin and the pressure too great. They are going to pop. The price is going to go 'poof'.  We in the precious metals camp will all get a woof of air in our faces instead of money.

Let us think about that for a moment.

Are their skins too thin? Well if you consider that only around 3 - 5% of all Americans (and probably New Zealanders) own gold and silver in any form, then I would think the skin be quite thick. In other words, a lot of buying is needed before we even think about thin skins.

Imagine if the participation rate in this market went to 10%. I have seen figures that in the late 1980's around 25% of the worlds wealth was placed in gold investments. The figure today is around 0.02%! No bubble to see here folks. Skin quite thick, pressure OK.

There's still time to participate in this market and protect your wealth. As long as money is being produced out of thin air and the money base increasing exponentially, then asset prices will go up. It's a law.

More on : Money divided by Goods and Services = Price tomorrow

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