Is the Table Set for a Mania in Precious Metals?Jeff Clark There are, however, very valid reasons to reasonably expect a mania in our sector. For one thing, manias have occurred many times before, but the main issue is that a mania in gold and gold stocks is the likely result of the absolute balloon in government debt, deficit spending, and money printing. Saying all that profligacy will go away without inflationary consequences seems nave or foolish. Inflation may not attract investors to gold and silver as much as force them to it. Now, one could make the argument that any rush into gold and silver will be muted if no one has any savings, especially given that demographers say a quarter of the developed world will soon be retired. But even if individuals are wiped out, the worlds money supply isnt getting any smaller, and all that cash has to go somewhere. I wanted to look at cash levels among various investor groups to get a feel for whats out there, as well as how money supply compares to our industry. Data from some institutional investors are hard to come by, but below is a sliver of information about available cash levels. This is just SP 500 corporations there are many more corporations in the world, as well as pension funds, hedge funds, sovereign wealth funds, mutual funds, private equity funds, private wealth funds, insurance companies, and other ETFs. Its striking, when you really stop to think about just how big the impact could be if some significant fraction of the larger financial world started chasing the small niche market that is gold. Such cash inflows will send our industry to the moon. In the meantime, keeping our eye on the big-picture forces that have yet to play out is the plan to follow. Sooner or later, though, Im convinced the catalysts will kick in that will pull/push/drag/compel/force the mainstream into our sector. I suggest beating them to it. And when the mania arrives, well all wonder why anyone doubted it in the first place. Jeff Clark has been delving into a variety of data to try to figure out recent precious-metals market moves, in order to spot a shift in trends. Thats important because being ahead of the trend gives investors maximal profit opportunities. Another solid analysis Jeff wrote is What Volume Tells Us about Gold Stocks. linkwithin_text=Related Articles: 