But is that all a bubble is– simply meteoric growth, seemingly with no end in sight? If so, let’s examine some other ‘bubbles’ in our society.

1) Number of people renouncing US citizenship: Four years of exponential growth. [Source: Bloomberg / IRS]

2008: 146
2009: 742
2010: 1534
2011: 2048 (estimate)

2) Number of Facebook users: Eight years of viral growth. [Source: Facebook]

August 26, 2008: 100 million
April 8, 2009: 200 million
September 15, 2009: 300 million
February 5, 2010: 400 million
July 21, 2010: 500 million
January 5, 2011: 600 million
May 30, 2011: 700 million
September 22, 2011: 800 million
February 4, 2012: 845 million

3) Number of Americans on Foodstamps: A disturbing, tragic long-term growth trend. [Source: USDA's Supplemental Nutrition Assistance Program]

2007: 26.3 million
2008: 28.2 million
2009: 33.5 million
2010: 40.3 million
2011: 44.7 million

4) Number of FBI/NICS background checks to obtain a firearm in the United States: Eight years of consistent growth.  And baby, we ain’t seen nothin’ yet. [Source: FBI]

2004: 8.69 million
2005: 8.95 million
2006: 10.04 million
2007: 11.18 million
2008: 12.70 million
2009: 14.03 million
2010: 14.41 million
2011: 16.45 million

5) Number of requests the US government made for Google user data: 4 straight reporting periods of astounding growth. [Source: Google]

6-months ending 12/31/2009: 3,580
6-months ending 6/30/2010:  4,287
6-months ending 12/31/2010: 4,601
6-months ending 6/30/2011:  5,950

6) US federal government budget outlays: a never-ending growth trend of out-of-control spending. [Source: CBO, OMB]

2000 budget: $1.9 trillion
2001 budget: $2.0 trillion
2002 budget: $2.2 trillion
2003 budget: $2.2 trillion
2004 budget: $2.3 trillion
2005 budget: $2.4 trillion
2006 budget: $2.7 trillion
2007 budget: $2.8 trillion
2008 budget: $2.9 trillion
2009 budget: $3.1 trillion
2010 budget: $3.6 trillion
2011 budget: $3.8 trillion

7) And last but not least, US monetary base as of January 1st each year [Source: St. Louis Fed]

2001: $  616.7 billion
2002: $  673.7 billion
2003: $  719.6 billion
2004: $  756.8 billion
2005: $  793.8 billion
2006: $  825.2 billion
2007: $  843.5 billion
2008: $  851.4 billion
2009: $1,730.2 billion
2010: $2,010.1 billion
2011: $2,057.1 billion
2012: $2,647.7 billion

Ultimately, a bubble isn’t something whose price keeps going up. It’s something that is steadily expanding, supported by nothing but hot air.

The exponential growth in Facebook users (or other digital platforms like Skype, Angry Birds, etc.) is underpinned by perceived value… not hot air. The growth in FBI background checks and firearm sales is underpinned by legitimate consumer demand, not phony speculation.

The growth rates in US citizenship renunciants and US government Google user requests are equally underpinned by a legitimate (though unfortunate) trend of declining liberty. This is certainly not hot air.

The value of gold is as an anti-currency– a rejection of the fiat system in favor of something more tangible that cannot be conjured out of thin air. This is not a bubble. It’s a simple causality. And as long as the trends in #6 and #7 above hold, a continued rise in the gold price is supported.

Guest post by Simon Black. He’s one of the rare persons I follow and read what he says with a big attention. We are really happy to have his guest posts here at GeoDagher.com . You can also find Simon Black’s articles on his website: http://www.sovereignman.com and I encourage you to subscribe to his newsletter.

I fail to describe him better than how he does, that’s why I’ll quote him:

I’m Simon Black– international investor, entrepreneur, permanent traveler, free man. This free daily e-letter is about using the experiences from my life and travels to help you achieve more freedom.

In the last 3 months I’ve traveled to over 20 countries, met with a President and several diplomats, briefed sovereign fund managers, flown an aerobatic stunt plane, started several companies, hitchhiked in Bogota, taken a train across the orient, lectured on entrepreneurship in Eastern Europe, and personally provided venture capital to new start-ups.

I’m a student of the world, and I believe that travel is the greatest teacher. My knowledge is practical, and hopefully of significant use to you. Off the top of my head I could quote you the price of beachfront property in Croatia, where to bank in Dubai, the best place to store gold in Singapore, which cities in Mexico are the safest, which hospitals in Asia are the most cost effective, and how to find condo foreclosure listings in Panama.

I believe that in order to achieve true freedom, you have to be able to make money, control your time, and eliminate the mindset that you are subject to a corrupt government that is bent on degrading your personal liberty.

Yesterday I made a commitment that should last for life (in theory). To make that commitment, I had to think a lot, take my time and evaluate the conveniences and inconveniences of this act. Furthermore, I had to evaluate the advantages of my fiancé over other “opportunities” (we’re taking emotions out for the time being).

In trading, we have to think and analyze a lot (relatively to the time frame we are trading). We have to take our time before taking any commitment in a trade. We also need to evaluate the scenarios of being right or wrong. Basically, it’s the same process.

In trading, we analyze the markets by weighting the pros and cons, we take the necessary time before jumping into a trade (let’s take as an example, a risk-off trade in comparison with a risk-taking trade), then we choose the best market we think it would yield more with a minimum risk. So let’s say we decided to jump in a risk-off trade, we’ll need to choose our “fiancé” … or the market that would yield more as per our analysis (like let’s say shorting the EURUSD or the S&P500 or…)

Let’s focus a little on the differences between the two cases. Getting engaged is a decision that is overwhelmed with emotions. These emotions over-take the analysis we can do to the point that we may even not be able to clearly weight our decision. Once you get engaged, reason will start to take emotions’ place. In trading it’s very different; the decision (or commitment to take a trade) is based on pure reason but once the commitment is taken, emotions will start to take reason’s place.

Another difference is the time frame of the commitment. In an engagement, it’s an oath that should be held for life. Changing your mind would not be a very good idea (at least from a moral point of view). In a trade, you are free to change your mind hundreds of times in a minute. In the end, that’s what trading is all about; changing your mind. If you are bullish, you have to change your mind after a while to take your profits or your loss. Otherwise, trading would be useless.

I’ve seen a lot of traders that get married with their positions in the market which is something they need to work on. We (as traders) must change our minds. It’s not something that is related to honor but to profits. The more we can change our view easily, the more we’re adaptable to market conditions. Imagine that you are a General on a battlefield. You have this plan that you built for months which is something any war strategist can do. But once the battle starts, you discover that your enemy’s attack cannot be countered by your original plan. There’s where you need to be more flexible and adaptable in order to counter-attack.

Finally, my advice to you would be: “Get married! But not with your positions”