Gold is not in a bubble, but Justin Bieber is, and fortunately Bieber’s bubble has already popped.
Remember the .com bubble (aka IT bubble) and the real-estate bubble? What did these bubbles have in common (besides the fact that they were pumped with bad monetary policy)? Virtually everyone wanted a piece of the action, and if you couldn’t get in, you were talking about it. And if you weren’t talking about it, or you weren’t interested, it was in the news everywhere, every day. It was omnipresent. You couldn’t escape hearing about it from the main-stream media and their teams of experts and talking heads.
Logically, the amount of interest in any given subject (in this case, asset bubbles) is reflected in search engine traffic. There are many tools on the Internet that display this type of information. For example, during an ordinary day, there are probably hundreds of thousands of people doing searches on Michael Jackson. When he died, Michael Jackson was in headlines around the world, and you can see a huge spike in internet search interest on that day.
The animation below uses several common gold and silver internet search terms to demonstrate how very little people are interested in gold and silver compared to Justin Bieber.
The good news is that Justin Bieber is in decline, but more importantly you can see that neither gold nor silver are in a bubble. In fact, search engine interest in gold and silver is a flat line compared to Justin Bieber. Relatively speaking, no one is talking about gold. There is no gold bubble.
Considering the world’s lack of interest in things that really matter–like how the banking system works, something that actually affects our daily lives–and the average person’s obsession with pop culture, you might expect similar results when comparing real estate with Justin Bieber. The following chart might surprise you however. Here you can see that interest in real estate actually surpassed the pop icon:
So until everyone on the street is talking about gold, until it’s in all the MSM headlines, and until interest gold is on par with the latest pop star, there is no gold bubble.