Hey Senator Bulworth... Great question. The simple answer is historically it doesn't tend to work that way. The more complicated answer lies in the supply and demand story... which is kind of like a slinky. Supply tends to be dictated by weak demand in a bear market. Producers make only enough minted product to fill anemic demand. Then, demand surges. Supply falls short and premiums rise. Producers scramble to make more product to meet the growing demand. And they invariably overshoot. Then, the market is flooded with product as demand wanes. I always prefer the steady, stair-step approach to higher prices. The 100-year gold chart bears this out. The best time to buy was yesterday. The next best time is today... Rich
While you mentioned that a meteoric rise in price is not healthy due to a "catastrophic" fall on the other side, is this a given? Why wouln't prices just peg at the new higher level?
Hey Senator Bulworth... Great question. The simple answer is historically it doesn't tend to work that way. The more complicated answer lies in the supply and demand story... which is kind of like a slinky. Supply tends to be dictated by weak demand in a bear market. Producers make only enough minted product to fill anemic demand. Then, demand surges. Supply falls short and premiums rise. Producers scramble to make more product to meet the growing demand. And they invariably overshoot. Then, the market is flooded with product as demand wanes. I always prefer the steady, stair-step approach to higher prices. The 100-year gold chart bears this out. The best time to buy was yesterday. The next best time is today... Rich
While you mentioned that a meteoric rise in price is not healthy due to a "catastrophic" fall on the other side, is this a given? Why wouln't prices just peg at the new higher level?