Good post.
Those who raise 1980’s spike need to know how different things are now.
In August of 78, gold broke through the $200 barrier after years of trading in the $100-200 range. I’ll bet that some folks back then were worrying that it was a bubble.
By September of the next year (1979), gold doubled its record, hitting $400 (one-third of that gain alarmingly coming in the final two weeks of the period).
In the following 15 weeks, gold doubled again, with half of that rise in the last two weeks of the period. See the pattern, rises happen fast, and faster at the end, like a whiplash acceleration.
Here’s the 1980 bubble summary: New record, followed by quadrupling in price in 1-1/2 years, including a 25% rise in the final two weeks.
In the past decade, we’ve seen some 25% years, but no 25% fortnights (two-week periods). More importantly, it took the last decade for gold to quadruple, while the run-up to the 1980 bubble saw quadrupling in 1-1/2 years. The lesson is that how fast something rises can indicate whether the rise is sustainable, as opposed to being a bubble.
Doubling in a year is common among stocks and commodities in certain years. That’s my threshold for when I start to pay close interest, and worry about “bubbles.”
In the past decade, we’ve seen some 25% years, but no 25% fortnights.