In my opinion the context in which George referred to gold being the "ultimate bubble" is simply this:

When nations get themselves into trouble, meaning (1) massive debt; (2) high unemployment; (3) declining revenues; (4) increasing expenditures; (5) currency devaluation and (6) zero interest rates on Government Bonds; investors or people with money get scared and buy gold or silver - the ultimate historical refuge that cannot be debased or destroyed. The law of supply and demand dictates the price of gold and silver will then rise to the point that balance is achieved.

When the troubles start to subside; debt starts to get repaid; employment levels rise; tax revenues rise; expenditures decrease; interest rates rise and the value of currencies increase, investors start to relax, breathe easier and sell some of their gold and silver. The price of gold and silver will thus fall.

So the "bubble" that is created in time of trouble will burst when the trouble dissipates or develop a slow leak, depending on the pace of recovery.

The question I ask myself is this: How many years will it take for the current troubles to reverse and get ourselves back to the "good times" of the '50's, 60's and 70’s?

I suspect it will not happen during my lifetime or the lifetime of my children. So I see the bubble continuing for the next 50 years and gold rising steadily at a minimum rate of 30% per year until supply meets demand.

With demand rising and set to explode once our American friends find out there is little or no gold in Fort Knox, West Point or any of the bullion banks in New York and the mind boggling naked short positions have to be bought out, it seems to me it will be many years before supply can meet persistent demand.

This will ring in "the golden era" and be wonderful for Canada and other countries whose citizens allow mining. I predict that almost all dormant gold and silver mines in Canada will be brought back into production - plus a minimum of 3000 new ones, discovered by keen eyed prospectors walking over every square inch of known gold and silver bearing geology in the Country.

Unemployment will drop to zero, immigration will increase dramatically, most husbands will be "Miners" @ $85.00 per hour (all-in), wives will stay home and raise their kids and there will once again be two cars, a boat and a skidoo in every garage.

Fred25