Aftershock: Protect Yourself and Profit In The Next Global Financial Meltdown, Second Edition

The Future Gold Bubble: The Biggest, Baddest Bubble of All

Although gold will perform spectacularly in Phase II (the Aftershock), it is important to recognize that, like the stock market and the dollar, gold too will follow a classic up-down bubble trajectory. The coming gold bubble could easily last 10 or more years, and at its height, gold prices could become truly stratospheric—so high, in fact, we won’t even mention our best guess for fear of losing credibility. (Of course, as soon as the Aftershock hits, we will certainly tell you all about it because by then it will all seem much more understandable and believable.)

The reasons that the gold bubble will go up are actually the same reasons the gold bubble will go down, only in reverse. Gold will go up when the other bubbles (stock, dollar, real estate) go down because investors will want to buy something seemingly stable and profitable, while their other assets look increasingly unstable and unprofitable.

In time, however, the instability of other assets will evolve to stability again, and their huge downside risks will transform back to normal upside gains.

However, people will be reluctant to give up on gold at that point, just as they are reluctant to give up on stocks and real estate today. Gold will have been a proven winner, and stocks and real estate will have become proven losers. People will say the reason for gold’s rise is a fundamental shift away from intangible assets, such as stocks and bonds (whose value can ...