A Gold Bubble?
As the patsy mainstream media continues to try to scare investors away from gold, probably the most common theme one hears is that "gold is in a bubble."

This word "bubble" strikes fear and panic in the heart of most investors since "most" investors have exemplary track records for listening to the media and investing at the top of bubbles and subsequently getting slaughtered.

For instance, back in the late 90's, tech stocks and mutual funds formed a tremendous bubble in which the final stage saw the average tech mutual fund gain 100% in 1999, enticing investors to buy in at the top. Of course, they subsequently lost most of their investments the next year.

Then, after enough time had passed for investors to forget the lessons learned in the tech bubble, investors began chasing real estate. "Real estate is different," they reasoned. "Real estate always goes up."

Flipping houses became the new thing to quit your job for, much like day-trading had been in the early 90s. Of course, that bubble too came to a screeching halt in 2008, the bottom of which we have still not seen.

Which brings us now to our discussion of gold. Is gold in a bubble?

There are two primary charactaristics of any asset that becomes "bubblicious." First, everybody's doing it. No matter where you go, the talk is about that particular asset or fad or trend.

And second, bubbles always have a parabolic rise at the end of the game, as mentioned above when discussing the tech bubble.

Looking back at the last gold bubble of the 1980s, gold went from $225/oz. to $875/oz in 12 months, a 387% increasing in one year. That was certainly a bubble.

So, what do we find today? Is gold in a bubble? Year-to-date, gold has gone from $1388 an ounce to a high a few weeks ago of $1900. That's a nice 37% gain, certainly not a parabolic blow off where everyone is running out to the local coin shop trying to get in on the action!

In fact, to equal the 387% blowoff of the 80s, gold would need to reach $5,300 before year end. As you can see, we are no where near the "bubble" status that the anti-gold (banksters) crowd would have you believe we are in.

Let's not forget that the last gold "bubble" was born of a similar economic climate that was localized to the US alone. This time around, the whole world is in the crapper, so the "blowoff" stage for gold should be quite a show. Clearly, we are not there yet.

Will this current runup in gold end in a bubble? Certainly. ALL bull markets end with bubbles and this one will be no different as Joe Sixpack finally wakes up and realizes that the paper investments he trust are no longer trustworthy and seeks shelter from gold. Then, as the masses fight for whatever gold scraps they can find, the bubble will certainly come, at which point we'll be glad to sell them ours at unheard of premiums.