Anecdotal evidence of gold bubble

During the dot.com and real estate bubbles of the last decade it was so difficult to get a contrary opinion from anyone who wasn’t drinking from the bubble kool-aid.  One of the ways any investor, yes, even you, could have recognized that it was a bubble was by who was talking about the stock market or real estate market.

Normally the general public concerns its conversations with family, work, television shows, celebrities or sports.  So when people start talking about investing in something as a part of regular conversation, it’s a sign that an asset has entered bubble-territory.

So what to make of the video story this morning from the Wall Street Journal about new gold vending machines that are being installed in upscale malls around the world?  Just enter your cash and receive a chunk of gold, from 1 gram to a full ounce.  This reminds me of the dot.com era and its mall-based brokerage firms.  It also reminds me of the real estate bubble era mall-based mortgage broker.  Remember Countrywide and its mall offices?

At the moment I appear to be one of the few gold naysayers.  But anytime an investment makes itself into the imagination of the general public it means that a crest has neared.  I’m not saying gold prices are going to crash overnight.  I am saying that its run is likely nearing an end within 18 months.  See my post on gold, and my 2011 predictions for more information.

Jason