goldsilverworlds.com / October 25, 2012
Grant Williams, author of the economic newsletter Things That Make You Go Hmm who has been working for more than 2 decades in the financial industry, recorded this remarkable video presentation about economic bubbles.
In fact, bubbles are very easy to spot because of their valuations that go out-of-control and are not justified by any fundamental measure. Yet almost all people get trapped, every time again, by participating in the frenziness and joining too late.
Grant Williams says in his introduction that ”Bubbles happen because the vast majority of people can’t see for what they are”. Knowing that the first bubble dates from the 17th century, one should expect at least that the vast majority of people should approach a coming bubble in a rational way. The main point is that bubbles are purely driven by one of the instincts of human nature, being emotions. Could that be one of the reasons why this old quote still carries truth with it: “The only thing we learn from history is that we learn nothing from history.”
Although we strongly recommend listening a couple of times to the video presentation, we can imagine not everybody has the time. For the readers who only have a couple of minutes to spend, in this article we provide the key take-aways, beginning with this graph which shows where we are today in the gold bubble.