For over 30 years, Wall Street and its media have portrayed gold as a worthless investment, a "Barbarous relic." The propaganda has been intense, and has shaped the minds of many, including the big money managers and investors.
I think that the vast majority of the market does not believe the rise in gold and silver is real. There are a flood of top callers daily on Financial Television. In my opinion the bearish mentality towards metals and commodities in general is still the prevailing perception. If anything, Wall Street promoted for years that we are entitled to low commodity prices. Any rise was always called manipulation, and the politicians always joined in calling for investigations against the evil speculators. The oil sector is a good example over the last six or so years. People that invest in gold are called all sorts of names on FT. Names like conspiracy nuts, gold bugs, etc...
When the perception of true value changes in the minds of the big money managers, the well run and capitalized miners will see a huge flood of investment.
"For over 30 years, Wall Street and its media have portrayed gold as a worthless investment, a "Barbarous relic." The propaganda has been intense, and has shaped the minds of many, including the big money managers and investors."
In my opinion, you hit on a key point: the people running significant amounts of money tend to be younger mutual fund managers and hedge fund guys; they were educated as Keynesians and don't believe in gold - period.
We need them to start believing and pouring some of that money they control into mining stocks. Until that starts happening we won't see any bubble like price on mining stocks. However, I do think that day will come, just because at some point they won't be able to ignore it. And if gold continues upward the profits some of these miners will be earning will get attention.
The market cap of the mining sector is relatively tiny. Once miners become the place to have your money we'll see stock prices that will seem astounding by today's standards. But I think that could be a couple of years off, at least.
It is not 1980. The markets for gold and silver are much different now. The 1980 move was basically a North American situation. The market in gold was very small. Today, it is truly a world wide market. Also the US was a much different economy, and was much stronger than today. The US was truly a world leader at that time. Those days are long gone.
"And that is the very time precious metals will pull another 1980 and leave all investors in the metals high and dry for another 30 years."
That assumes it will be possible for the FED to jack up interest rates like they did under Volcker. I'm thinking that might be impossible, now. IMO, it would only be possible after some really serious price inflation like in the 70s, which we haven't had yet. Therefore, I think the time when pms will peak and go into another multi decade bear market is probably still several years off.