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<p>[QUOTE=&quot;InfleXion, post: 1294281, member: 29012&quot;]I agree with you in most cases, but let me get into the details of what I meant. The key part of my distinction was that of a physical market as opposed to a paper market.&nbsp; </p><p><br /></p><p>As per Wikipedia: <a href="http://en.wikipedia.org/wiki/Silver_Thursday" target="_blank" class="externalLink ProxyLink" data-proxy-href="http://en.wikipedia.org/wiki/Silver_Thursday" rel="nofollow">http://en.wikipedia.org/wiki/Silver_Thursday</a></p><p><br /></p><p>&nbsp;</p><p><br /></p><p>So with 1980 PMs, that bubble was caused by leverage external to the physical market and was only popped by rule changes on the COMEX. </p><p><br /></p><p>My point with precious metals is that the supply is finite. So the characteristics of a bubble cannot be met, since it would require either artificially decreasing the supply or artificially increasing demand. It&#039;s not artificial if someone isn&#039;t buying on margin. Demand is a global net result and thus not able to be impacted except in cases such as silver where the total market ($30 billion) can be bought in it&#039;s entirety by the large players, which means that the only reason it is capable of getting into a bubble is because it&#039;s currently in an anti-bubble. Gold&#039;s function is as a measurement of currency value so I would argue that it cannot get into a bubble, since it&#039;s just an inverse reflection of currency. </p><p><br /></p><p>With tulip bulbs you can always plant more, or maybe there&#039;s a bad crop one year and supply goes down, but precious metals have a relatively fixed and immovable level of production. They&#039;re produced by stars and will eventually run out on a long enough timeline unlike plants, houses, and especially paper IOU&#039;s. Farmland is the one thing you mentioned that shares this characteristic, but since it&#039;s far more difficult to exchange (illiquid) than precious metals the supply/demand dynamic has a lag effect and much higher propensity for bottlenecks. So I don&#039;t think that&#039;s an ideal comparison since the dynamics are very different.[/QUOTE]</p><p><br /></p>

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