> When average joes start piling in and blowing up the price, then gold may take leave of its fundamentals and we'll have a bubble.
> The genuinely unsophisticated have a negative net worth, and they're not holding gold.
Perhaps I'm misunderstanding, but if I take both of these seriously then it sounds as if your criterion for a bubble is that most of the money sunk into something comes from people with negative net worth. By that criterion, I'm not sure that there has ever been a bubble in anything.
(Maaaaaaybe houses in the recent property bubble, but (1) I very much doubt it and (2) in any case mortgages are rather a special case, in that for a long time lots of people have had large investments in property that were mostly leverage; I don't think anything comparable has ever been true for gold, shares, Dutch tulips, or anything else.)
> The genuinely unsophisticated have a negative net worth, and they're not holding gold.
Perhaps I'm misunderstanding, but if I take both of these seriously then it sounds as if your criterion for a bubble is that most of the money sunk into something comes from people with negative net worth. By that criterion, I'm not sure that there has ever been a bubble in anything.
(Maaaaaaybe houses in the recent property bubble, but (1) I very much doubt it and (2) in any case mortgages are rather a special case, in that for a long time lots of people have had large investments in property that were mostly leverage; I don't think anything comparable has ever been true for gold, shares, Dutch tulips, or anything else.)