Saturday, October 22, 2005

An Aspect of the Gold Bull Market

“people lose their judgment collectively but only come to their senses slowly and individually.” - I forget who wrote this

Since the beginning of the '80s (about a quarter of a century ago) massive amounts of USD have been digitally created out of thin air. Most of these USD have gone into financial instruments (paper, mostly digital)(stocks and bonds). The minds of the crowd have been conditioned to believe that stocks always go up, that playing in or investing in the financial markets is the way to get ahead. Forget about creating real tangible wealth. Gold and silver? What would anybody want that stuff for? What good is it? They do not do anything. Over decades the crowd has lost a lot of important knowledge.

This situation is ever so slowly starting to change. There is a huge amount of mental inertia at rest that will be ever so slowly moved into motion. That is why over 4+ years gold still has not even doubled in price. Most do not even know that there is such a thing as a current gold and silver bull market that is under way.

The **"money" supply** inflation has already happened but it seems nobody is concerned since people think it created them wealth in the financial markets, and more recently in the real estate markets. Now **price** inflation of real stuff is starting, to an extent that can not be ignored, not that most people right now know what to make of it. Given enough time, as the prices of stocks, notes and bonds, and real estate keep going down down down, and the prices of gold and silver keep going up up up, they will start to realize that maybe something fundamentally has changed.

When the crowd finally starts to lose faith in financial instruments the relatively tiny markets of gold and silver, and their related mining and explorer shares will have price explosions.

Yes, the gold and silver bull markets are not new, are starting to get old, but they still have massive price increases still to go, because the crowd still does not get the big change that has happened, the massive devaluation of the USD that is still not apparent to the crowds.

The gold and silver bull markets are a long long way from ending.

In the US:

"We are fast approaching the stage of the ultimate inversion: the stage where the government is free to do anything it pleases, while the citizens may act only by permission, which is the stage of the darkest periods of human history,
the stage of rule by brute force." - Ayn Rand

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