Gold Bubble?!? Silver Bubble?!? Possibly…

Last Monday, I recommended that a very good friend of mine move a small portion (5%) of her investments into precious metals. Our conversation went long and she moved some of her funds over just before the BIG drop occurred. Being seasoned in investing, she understands she’s in it for the long haul and that her investments in metals are for hedging against the inevitable inflation coming our way. She’s seen her account go down about 10% since Tuesday, but is taking it in stride and just waiting for the turn around. She asked me an interesting question in an email today.

Is the Gold and Silver Bubble over? Oddly, I was amazed that the thought of it being a “bubble” never occurred to me! Why haven’t I heard it being mentioned earlier? I read everything I can about all the financial markets, and the “bubble” word is hardly ever mentioned. Maybe I unconsciously ignore the word itself when I read? The only bubble talk out there predominately speaks of the housing bubble and how it has popped. Interesting enough, a new article popped up on Yahoo finance soon after I read her email that was from bankrate.com. I don’t know if would say Gold is in a “bubble” now, but it’s definitely inflating.

Click here to read the article on Bankrate.com.

We haven’t seen the masses jump in yet. When we see people lining up at the Gold shops to buy some, I believe that’s when it’s time to get out. I DO NOT plan to hold on to my gold and silver forever. I hope to liquidate it at the top of the market. Timing it will be tough, but when we start to see the word Gold Bubble all over the news, I’ll know the time is near to sell.

Sadly, I truly still hope that Gold and Silver do not get to point where their prices get ridiculous. If that happens, it will mean that our middle class and US economy as a whole has fallen into really really deep problems. It will also mean that inflation has gone out of control and our dollar has finally lost any power it once held.