Ok, you bought a dip.
Now what? What are the forces behind the 10 year bull market – and how will you know when they’re played out, spent, finito? Eric Sprott has some thoughts on that topic that he shares with us today.
Sell Signal #1: Mania
This is also known as a Bubble. It’s characterized by wild price swings and irrational exuberance. Not only do all the funds own gold in various forms, but so does your Aunt Judy and the guy who does your dry cleaning. And they’re all talking about gold and how they’re going to buy more. When everybody is in and there are no more buyers – guess what happens to the price? We are nowhere near this mania/bubble stage.
Sell Signal #2: Governments/Central Banks Become Responsible
The temptation to make a joke out of this idea is tempered by the fact that government irresponsibility has delivered the world’s economies to the end of a road – and that really isn’t very funny. Post-collapse, governments will be forced to become responsible again. Exactly how that collapse will play out is unclear but there is no sign that the guilty governments (you know who you are!) are willing or able to act responsibly anytime soon.
Sell Signal #3: Gold Standard is Reinstated
Advocacy of a return to the gold standard is no longer considered goofy. The president of the World Bank floated the idea last year and since then, discussion of how it would be implemented is fairly common amongst the exalted poobahs – not just the Ron Pauls of the world. Assume that this is under active consideration by the people with the ability to make it happen. But if it does happen, it will be sprung on the world as a surprise. And part of the surprise might include confiscation at bargain basement prices.
Thanks Eric Sprott! You provide the ideas and we’ll flesh em out!