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jonesinamillion

Pm Bubble?

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Joined here 4 years ago in 2010 when I started buying PMs in relatively small quantities.

Sold some, helpd some.

What are your thoughts on the "bubble" that everyone was talking about back then?

I've seen silver drop by massively from when I was buying! Gold has corrected back to where it was pretty much.

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IMO it's a good buy at current prices in inflation adjusted terms. PM's are cheap at the moment because the hoarders have been out hoarding property - next crisis they will be back to hoarding PM's.

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For a bubble in any asset to blow up, you need money that is cheap, easily available, and in vast quantities. That cuts out gold as being able to bubble, because you have to pay up front to physically own it.

A price spike is not the same. What we saw in the lead up to 1980 and 2011 was a spike. In both cases a dire economy was mainly to blame, as punters went to the safe haven.

World geopolitics was a bigger factor in 1980, than 2011. But the main driver to the spike was a tanked out economy in both periods.

In both scenarios it was the expansion of the money supply that put the economy back on an 'even keel' This time there is a much reduced manufacturing base in the west, and a bubble building up in equities and bonds. With a rekindled boom still chugging along, there are bigger steaks to fry than gold for now.

When boom turns to bust you will understand why it was wise to hang on to your gold.

..._

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