Rick Rule - Many Black Swans that Could Hit This Market

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/10/4_Rick_Rule_-_Many_Black_Swans_that_Could_Hit_This_Market.html

“If there is a bid for gold and a hedge fund is having trouble meeting redemptions, they will sell their gold.  How long can this go on?  I don’t know.  Remember this, Eric, in the midst of the biggest gold bull market of all-time, the 1970 to 1980 bull market, when gold went from $35 to $850 an ounce, in the middle of that decade, in 1975, the gold price fell by half....

“Could that happen now?  I don’t think so.  The set of circumstances that caused that market to fall by half was an increase in real US interest rates and a consequent increase in the value of the US dollar.  I don’t see that occurring.

Remember also, in 1975 when the gold price fell from $200 to $100 an ounce, certainly an unnerving event for people who were long gold, in the five years after that gold ran from $100 an ounce to $850 an ounce.  So someone who got shaken out of the gold market, in a cyclical decline, deprived themselves of an 850% escalation over the next five years.