I think it will take a while to deflate, and might continue quite a bit higher than most people now expect. It might be a very dangerous market to sell short.
Past metals spikes were driven by greed. This one seems more driven by currency fears. Folks feel safer owning gold, silver, platinum, palladium than owning Dollars, Euros or Yen. I think the market needs to regain confidence in currency before any bubble bursting.
On the other hand, it is always dangerous to think "It's different this time".
I'm long silver (SLV) and several mining stocks.Economists and investors when will the precous metal bubble pop?
when do you think it will pop?
Not too soon as there is still money flowing into the market. I don't expect any govt to pop the bubble as they all have more pressing concerns.
what do you expect the effects on the economy to be?
Only good ones. Capital flowing to precious metal hoarding should be flowing to more useful places like capitalizing the means of production of goods and services. Popping the bubble will get more productive investing going.
Also any good ideas on how to slowly deflate the market instead of allowing a massive pop?
I don't think we have any interest in slowly deflating it. If the govt began a plan for slowly deflating the bubble, there would be time to jump on the other sides of the govt's slowing down trades and make really good money from a silly govt plan. Who cares if everyone holding gold gets annihilated? Precious metal investing is supposed to be risky.Economists and investors when will the precous metal bubble pop?
If I knew with a high degree of certainty, I wouldn't tell and put half my money on it (which tells you I think a bubble is already more likely than not).
The problem is that we are coming off one of the worst disasters in world financial history...and people tend to act like such once-in-a-lifetime catastrophes are regular events for a good while after they actually decrease in probability. Think of all those depression era adults who missed multiple (massive) bull markets in stocks because "it might crash again."
Plus the crisis in the EU.
Plus the possibility of hyper inflation in china.
Plus the incompetence of the politicians in the US.
Not really conducive to calling for a bubble in gold...just yet.
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