Gold most definitely NOT a bubble

Iacono claims gold is currently not a bubble. They are very right. Just look at the charts. This is not the first time gold has shot up so fast. And each time in the past, there have been plenty of nay-sayers calling it a bubble.

http://www.iaconoresearch.com/PublicArticles/public_articles.html

Also, the following chart from Agora Financial speaks volumes. It shows how in spite of steadily increasing expenditure on gold exploration over recent years, there has been a equally steadily decreasing rate of new gold discoveries.




Factors supporting much higher future prices in gold:

1) Heavy buying by Central Banks around the world. Central Banks are now net buyers, after being net sellers for the last 10 years. David Rosenberg today called for a target price of $2600 based JUST on China buying enough gold to sufficiently diversify its reserves. This is not considering the heavy buying other Central Banks around the world are bound to do.

2) Peak gold production has been reached. This is confirmed by both the above chart as well as an admission by a leading gold mining company last month.

3) Money printing by Western nations. And I anticipate this getting much worse in the future, particularly in the US and UK, as deficits spiral out of control and governments seek to pay the future unfunded liabilities- which by the way are mind boggling in their size. A currency crisis is bound to unfold and people will flock to real money (gold) at an accelerated pace.

All this well take gold to many thousands of dollars per ounce. Eventually, there will be a bubble, and this will manifest in the form of a "mania", just as other bubbles have. Only once there are lines of people waiting to buy gold, and when more people than not find it 'normal' to own gold, will there be a bubble. That would be the time to sell. But most definitely not now. As Marc Faber recently pointed out, gold at these levels (currently around $1200/ounce) is very likely more "inexpensive" than it was at $250/ounce in 2001, considering the fundamentals of the economy we live in;