What’s interesting is that a very small percentage of US Citizens actually own physical gold. If the gold and silver ETF’s didn’t exist most people wouldn’t even pay attention to the gold and silver markets.

Anyone that has ever held a gold coin in their hand understands the difference between the gold coin and paper fiat. It’s hard to detach people from the paper structure they grew up with, and unfortunately the majority of people that keep their money in paper will eventually become poor. The following article shows just how much demand there is for gold coins…..
http://www.goldnewswire.net/gold-coin-shortage#gold-coin

How can gold possibly go up much more than 10-15% more if everybody (and their grandparents) are already invested in gold fully expecting it to skyrocket? You seldom get as much consensus for an investment as there is out there for gold right now. I just don’t see how it can work.
/////////////////////////////////////
John, this is not the casejust look at the market cap of financials vs gold and gold stocks
Nowhere near the bubble stage

@Cool Change – your office is more valuable in one piece than it is in scrap materials, so to rip it apart for scrap doesn’t make sense. I mean really, does everyone around here think that we’re heading toward Armageddon, or what? If Armageddon does happen, then you should have bought some good farm land and a gun…forget gold. If Armageddon doesn’t happen, your $10K in gold could easily be worth only $5K if its value adjusts to match other commodities over the last year, so that really isn’t a good investment (which is my point). If the only thing to happen is devaluing of currency, then you still should have picked something other than gold, which is high relative to a vast number of other possible investments available for trade on the world market (the materials above are just a few of the possible examples). Seems like a lose-lose-lose proposition to me. Why is the choice only between cash or gold? I’d spend 10K on a non-inflated commodity or to better insulate my home before I’d get 10K worth of gold. It’ll either keep my heating bills down (assuming that Mad Max doesn’t show up), or it’ll keep the house from getting so cold in the winter if the Thunderdome is built and I can’t afford energy. Or, if the dollar halves in value, I’ve gotten twice as much labor and materials for my money. And who’s to say that the government doesn’t decide to take your bar of gold “for the greater good” at any point in time for Marcus’ gold-backed currency. We’re back to the land and gun. It’s unlikely that my new insulation will be ripped out for any reason. I can understand being worried about inflation; but gold… seriously?

The way I see it, buying $X of gold right now is the same as betting half that amount that more people will become so paranoid that they will continue to buy gold. You have to assume that people will speculate that it’s worth more than people already speculate it is worth. If recent history is a guide, that’s a pretty ballsy bet. There’s no logical reason to buy it otherwise.

@Cool Change – your office is more valuable in one piece than it is in scrap materials, so to rip it apart for scrap doesn’t make sense. I mean really, does everyone around here think that we’re heading toward Armageddon, or what? If Armageddon does happen, then you should have bought some good farm land and a gun…forget gold. If Armageddon doesn’t happen, your $10K in gold could easily be worth only $5K if its value adjusts to match other commodities over the last year, so that really isn’t a good investment (which is my point). If the only thing to happen is devaluing of currency, then you still should have picked something other than gold, which is high relative to a vast number of other possible investments available for trade on the world market (the materials above are just a few of the possible examples). Seems like a lose-lose-lose proposition to me. Why is the choice only between cash or gold? I’d spend 10K on a non-inflated commodity or to better insulate my home before I’d get 10K worth of gold. It’ll either keep my heating bills down (assuming that Mad Max doesn’t show up), or it’ll keep the house from getting so cold in the winter if the Thunderdome is built and I can’t afford energy. Or, if the dollar halves in value, I’ve gotten twice as much labor and materials for my money. And who’s to say that the government doesn’t decide to take your bar of gold “for the greater good” at any point in time for Marcus’ gold-backed currency. It’s unlikely that my new insulation will be ripped out for any reason. I can understand being worried about inflation; but gold… seriously?

The way I see it, buying $X of gold right now is the same as betting half that amount that more people will become so paranoid that they will continue to buy gold. You have to assume that people will speculate that it’s worth more than people already speculate it is worth. If recent history is a guide, that’s a pretty ballsy bet. There’s no logical reason to buy it otherwise.

That’s what Barry’s charts above show.

If you think, as VP Biden predicted, that some dire international test will befall the U.S. during the first months of the Obama administration, gold might just be a good short-term bet, especially if you think that investors will continue to flee U.S. equities because nobody seems to know how to get out of the pickle we’re in.

I have a platinum wedding ring that looks and feels just like stainless steel. My wife’s ring looks like tin. The shear amount of copper and steel that I could rip out of my office right now testifies to how common it is. People all over the world, who have never invested in a stock, have a little stash of gold(probably jewelry or coins) that the keep hidden away.

Gold is over priced right now. Maybe a bubble. I’m not buying it because the value will go down when things calm down. But then again, I already have all the gold I need. I’d rather have a $10k bar of gold laying around the house than 10k in cash.

A gold-backed currency is still possible – and preferable to fiat.