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Tuesday, January 04, 2011

The new bubble:gold

Since some time I was asking myself what would the new American bubble be and now I have the answer: gold.
While it is beyond any doubt that the gold resources are limited and this gives the value to gold, it is also clear that the value of something depends on the demand and the offer.
To a cave man one pound of pure gold was certainly worth much less than a chicken, and for a chicken is worth less than a wheat seed.
The big request of gold as safe saving is based on a society where there is actually somebody who has a surplus and has to save something for the future.
But when the last ounce of available gold will be sold to the last lucky man who has a surplus on his bank account, also gold, as precious as it can be, will reach its peak.
When there is nobody who wants or can afford to buy gold at that price, if you will need to sell it, you will need to do so at a lower price you bought it.
And when its price begins to lower, you can bet ALL will want to sell, making the price even lower.
The Americans have one big advantage compared to Europe.
They are a real "Nation".
But sometimes this could also be a big disadvantage.
When you need a lot of buyers it is not difficult to find them
Good marketing, suggesting, not imposing, convincing, presenting the product as what they need, that will make you trillionair in one day.
It is enough to find one and the others will follow.
That is what you need to create a "bubble".
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