Today we are getting another whiff of what’s wrong in the markets. Currently, the Dow Jones Index is down over 500 points, and the NASDAQ is off by more than 100 points. Who knows where the markets will finally end up at the close of trading, but it really doesn’t matter. Markets aren’t valued in days or weeks; rather it takes months and years. So, be patient, and you will be rewarded with at least a 50% decline in the Dow Jones Index.
Unfortunately, a lot of traders, even some frustrated precious metals investors, forget about the STAGES OF A FINANCIAL BUBBLE. It seems like after about ten years, all memory of the 2008 Financial Meltdown has been all but forgotten. While I can understand the “This time is different” by the Mainstream Media, I have to get a kick reading comments by disenchanted precious metals investors who have been swayed by the rampant insanity in the markets.
So, let me publish the stages of a financial bubble to remind those who have either been brainwashed by the Mainstream Media or who have just forgotten the fundamentals:
If I had to make a reasonable guesstimate, I would imagine we are somewhere going down the Peak slope or close to the Denial Stage. However, once the Dow Jones Index falls below 20,000, we will know that the markets have entered into the Fear Stage. During the Fear Stage is when I see the price and demand for precious metals to increase. As we enter the Capitulation Stage, then we could experience precious metals demand like we have never seen before.
Let’s take a look at the current Dow Jones Index chart. As I mentioned in several articles and...