The gold bubble has not popped! ...because gold is not in a bubble. There is no gold bubble. There is no such thing as a gold bubble. Never has been. Never will be. 1980 was not a gold bubble. And anyway, today's situation is entirely different.
In fact, gold is the opposite of bubbles. It is the inverse, the recipient, the beneficiary of "frothy air" that escapes at lightning speeds when bubbles pop. It has already capitalized on the demise two bubbles this decade. And it is now about to absorb the froth spontaneously expelled by two more, the two biggest bubbles the world has ever seen.
For all you technical analysts out there plotting and planning your eventual exit from gold before the blow off phase, I have a new pattern to introduce to you. I call it the Orbital Launch Pattern, or the Inverted Waterfall. In this pattern there is no blow off! It looks something like this...
As you can see, it is the inverse of The Waterfall Effect :
Think about what happens when a rocket shoots for space. Its fuel is consumed in the heat of fire, it sheds its extraneous dead weight which falls back to earth and burns up on reentry, and its underlying asset, a satellite, stays up in perpetual orbit.
What causes bubbles to form?
The answer to this question lies in a simple comparison of a few actual bubbles. Most recently there was "the Housing Bubble" and before that, "the Tech Bubble" or "Dot Com Bubble". In 1929 we had "the Stock Market Bubble". There were the concurrent bubbles in 1720, the British "South Seas Bubble" and the French "Mississippi Company Bubble". And of course there was "the Tulip Bubble" of 1637 in Holland.
In all of these bubbles demand quickly overwhelmed supply in a feedback loop whereby new demand joined the stampeding herd causing the price to rise, causing more new demand to join the stampede and so on. A self-reinforcing feedback loop. Then leverage or credit was added to the rocket-fuel mixture boosting prices to even higher stratospheric levels. With cheap credit even the shoeshine boy could get in on the action!
And with the shoeshine boy in, new and improved Ponzi-paper derivative financial trading products were created allowing the hyper-acceleration of speculative trading. Accelerated paper trading created shortages in the underlying object of desire which in all the above cases was something that could be produced to meet demand. But these temporary shortages blasted the price even higher drawing more lemmings into the stampede.
At this stage euphoria, greed, delusion and mania took over. This was when, in most cases, over-supply had been stockpiled to meet the delusional demand and the true insiders took their profits and got the heck out. Cheap credit was then cut off and the weakest players were forced to sell causing a panic in the herd of lemmings who promptly ran straight off the cliff.
Of course there were subtle differences in each bubble. But the commonality was that the underlying object of desire in each case could either be easily ramped up to meet demand through a little extra human effort , or it could at least be valued objectively through common metrics like income, rent, earnings, interest or through careful valuation of its component elements.
The true fair value of the underlying object of desire became obscured by frantic greed-driven trading of, in most cases, its paper equivalent. Then, with leveraged profits driving the paper trade and ramped-up production of the physical object, separation between paper and physical was imminent.
Separation of paper and physical. Sound familiar? Well it's not the same as gold. It is the opposite.
Take the tulip craze. In the early 1600's a rare tulip virus was identified which made tulips bloom in a brilliant mosaic of colors. These rare flowers soon became a status symbol. Then in 1625 an especially rare "mosaic virus"-infected tulip bulb was found which rose in price to around $25,000 in today's dollars. The trading of "paper tulips" went delusional and by 1627 one of these rare bulbs sold for the equivalent of $75K! This price caused speculators to quickly cultivate this rare breed of tulip proliferating its valuable offspring. As the offspring multiplied the rare bulb became much less rare. Then, "one day in Haarlem a buyer failed to show up and pay for his bulb purchase... within days tulip bulbs were worth only a hundredth of their former prices. The tulip bubble had burst."  Can you see the difference yet?
In 2000 the Dot Com Bubble ended with a wave of dubious IPO's for tech and Internet companies with little more than a clever idea. The Housing Bubble ended with a rash of ridiculous condo conversions (old apartment buildings flipped into condos) and a giant inventory of new homes that could not clear at even half the price.
To make matters worse, the easy credit that had fueled the Housing Bubble became a drain on the real economy and when it was cut off, the Ponzi financing available to individuals came to an abrupt end.
Pop Goes the Bubble
So as we can see, one of two fundamental things causes bubbles to pop, and sometimes both. In one case, frenetic delusional demand outpaces supply until malinvestment delivers a surplus supply and then the bubble is done. In the other case, frenetic delusional over-valuations outpace rational objective metrics until easy credit must be cut off to save the banks and insiders and then the bubble is done.
Normally bubbles stay popped for a generation or more, at least until the pain of spontaneous impoverishment is forgotten. Of course, once the underlying object of repulsion undershoots a fair valuation the forces of currency inflation resume a gradual ascent. But this phenomenon is anything but bubble re inflation.
In some cases post-pop bubble froth appears to flow directly into new bubbles, as in the case of the Housing Bubble following the Tech Bubble. From this perspective, we are living in a "bubble economy", which is actually true. But these serial bubbles are really just the result of Central Bank inflationary policy meant to dull the pain of newfound poverty like a shot of heroin, and not a flight of real, hard-earned capital.
The flight of hard-earned, highly valued capital always flows down the inverse pyramid directly to the safety of its solid foundation. (Please see: All Paper is STILL a Short Position on Gold)
In 1971 we could say that the high value of the US dollar was actually in a bubble. The clearest sign that this bubble was about to pop was Charles de Gaulle's demand of US Treasury gold as France expressed its desire to end the dollar's wealth reserve function. In pure desperation, the gold window was closed and boarded up like a bungalow in the Keys before a hurricane. This display of pure weakness and fright was like a pitchfork impaling the dollar bubble and gold promptly rose 2300%.
In 1929 the Stock Market Bubble burst and even though gold was under strict parity rules, severe pressure had to be released by raising its price 70%. But even this wasn't enough to contain the panicked flight of capital so domestic gold possession had to be outlawed as well.
In 1720 France, John Law's paper currency and "Mississippi Company" bubble popped. The entire capital flow went right into gold and silver. A frantic Law first limited the amount of gold that could be redeemed to stem the flow, then attempted to turn his company stock into actual currency, doubling the money supply and further impaling his bubble. Ultimately he outlawed the ownership of gold in a desperate and feeble attempt to save his dying bubble. But this only made things much worse for him and he was finally forced by the King to flee France for Venice where he died penniless eight years later. 
Lastly, from the day the Dot Com Bubble popped until the Housing Bubble popped (7 years later) gold rose 140%. Then, again, from the Housing Bubble implosion until today (a little more than 2 years), gold has risen another 70%.
Two Historic, World-Class Bubbles are About to Pop
Bubble #1: Government Debt (with a nominal value in the tens of TRILLIONS)
Bubble #2: Perceived Wealth, denominated in purely symbolic, un backed, unsustainable-Ponzi-debt-based currency (with a nominal value in the HUNDREDS of trillions)
Darryl Robert Schoon writes:
In the early stages of capitalist systems, interest and principal can be serviced out of the debtor’s cash flow. In the final stage of “mature capitalist systems”, they cannot.
Capitalism’s final stage is what Minsky calls “ponzi-financing”, when debt payments can only be made by additional borrowing. This is what the US, the UK and Japan are doing today, having to borrow against tomorrow in order to pay yesterday’s bills.
For 50 years, not one Dollar of new debt created by the US government to fund the activities it does not wish to tax for has been repaid. The debt has simply been “re-financed” with new debt being sold to retire the existing debt.
At some point, the end finally arrives. Ponzi-financing cannot service debt forever. Investing in unhedged paper assets is the bet that it can. Gold is the bet that it cannot. 
Amazingly the mathematical upper limit of Ponzi-finance coincides perfectly with the mathematical limit of the 28-year rise in past-issued bond valuations!
It is the 28-year hyperinflation of the US$-denominated debt asset bubble that is about to pop. When interest rates are falling (like they have been for the past 28 years), the value of past-issued debt assets rise. Anyone who has been playing the bond market since 1981 has made a "gross" killing! (Please see: Bill Gross):
Bill Gross buys $23M mansion in Newport
Friday, August 14, 2009 10:20 PM PDT
Here is the chart of interest rates since 1981:
Flip it over and you will see the chart of Bill Gross' profits during that same time frame:
Of course the inflation of this 28 year mega-bubble was given an assist by the systematic suppression of gold prices beginning with Barrick in 1983 and accelerated by Rubin and Summers in the early 90's with their Gibson's Paradox scheme and Strong Dollar Policy.
But the thing about THIS bubble's rise that is so different from any rise in gold is that the price of past issued debt has a natural upper limit. And the "lowering of interest rates scheme" has a physical floor, an inevitable and unavoidable dead end... call it ZERO.
Yes, we have seen a couple ventures into negative interest rate territory lately. But this is simply anathema to the very concept of money, period. It is the ultimate froth, the last breath of air you can blow in before a bubble pops. It is the sure signal that the end is nigh.
When interest rates hit ZERO, they only have one way to go. And that means that the value of past issued debt, the very kind of TRASH that China is sitting on a land-fill mountain of, only has one way to go... DOWN. This is the very definition of a bubble that is about to pop. As Peter Schiff calls it, this is The Mother of All Bubbles! 
There is no such thing as a Gold Bubble, Never was, Never will be
Investment demand, the kind of demand that uses any object of desire as an investment rather than a useful commodity, can obviously flow into almost anything; Tulip bulbs, stocks, bonds, real estate, computer geeks working out of their garage, etc... And as investment demand exceeds utility demand, malinvestment occurs producing the object of desire beyond its commodity demand, creating an inventory surplus.
But changes in the gold price are mostly driven only by investment demand. Industrial supply and demand in gold is very stable relative to investment supply and demand. So any significant rise in the price of gold is a clear indication of growing investment demand and is also a positive confirmation of the premise behind that demand, that gold will rise. This creates a self-affirming feedback loop of positive reinforcement.
And since gold production cannot be ramped up to meet demand like it can in bubblicious items, there is no reason for gold to fall back. Gold mining does not debase gold in the same way that dollars, tulips, homes, Dot Com IPO's or government bonds are debased through production. Mine production is taken from known reserves that are already valued, owned and traded, and all gold on the planet Earth is a fixed amount, the same fixed amount it was a million years ago. All we do is move it around, like poker chips on a table, to those savers that value it the most.
Furthermore, the price of gold is completely arbitrary. This means that gold can go as high as the people of Earth want to take it without EVER exceeding objective valuations by common metrics like earnings, interest or the sum value of its component elements. Gold IS the element. It cannot be broken down further, except perhaps by the LHC.
One of the most common criticisms of gold's use as an investment is that it cannot be valued the way stocks, bonds and real estate can. They are all commonly valued by their yields, and gold has no yield, therefore it cannot be fairly valued, or so the argument goes. But if we invert this argument then gold can never be OVERvalued either, whilst those other things can, and are... in a bubble!
The price of gold is arbitrary, ergo, there is no such thing as a gold bubble.
And finally, as gold's role in the world evolves from barter item to pure numéraire, to transactional currency, to simple commodity, and ultimately to wealth reserve par excellence, its value relative to the rest of the world can (and has) shifted both up and down by as much as two orders of magnitude. Such phase transitions in the functional value of gold completely invalidate "fair value" methodologies like that used by Paul van Eeden.
1980? This Time is Different!
The only way for a purely symbolic fiat currency to survive the sudden, self-reinforcing and complete coup de grâce (death blow) from its nemesis, gold, is for the central banker to get ahead of spontaneously exploding interest rates without completely demolishing the economy on which it feeds like a mutant parasite.
In 1980 this was possible, but only barely, through a drastic rate increase to 20%, and only because the economy and the national debt load was much different at the time. If the same thing was tried today the economy and the government would come to a standstill, followed by a complete and utter collapse. For this reason it is not only unlikely, it is impossible.
In 1980, the US was a net creditor nation with a balance-of-payments surplus. The financial industry was small and stable. And the US was not subservient to foreign creditors. Today the national debt is over $12 Trillion, the US Treasury Secretary must kowtow to the Chinese, and the financial industry is a brittle behemoth built on derivative quicksand. 
Because of these fundamental differences in 1980, Paul Volcker was able to successfully defend the dollar against the same existential threat which WILL take it down this time. That threat is capital flow into the dollar's lifelong nemesis, gold!
You can thank all the players and their activities as identified by GATA for making this time different. You can thank the mining giants that sold forward paper contracts for their future gold. You can thank our Central Bankers who leased half of their gold into the market to squash their foe. You can thank Rubin and Summers for their "Strong Dollar Policy". You can thank Alan Greenspan for the easy green. You can thank them all for making damn sure that this time there is absolutely nothing the Fed will be able to do, nor will it want to!
Interest rates will rise with a vengeance, and soon. And the Fed will have no way to get out in front of them, and no desire to do so either, which would make the Fed look like the entity that single handedly destroyed the economy and the government's golden egg-laying goose. No, the Fed will prefer to let Mr. Market destroy its Ponzi currency scam with the Chairman's remote aspiration of avoiding the hangman's noose-wielding angry mob outside with nothing left to lose.
Unlike 1980, this time gold will go up and stay up! I'm not saying there will not be a temporary overshoot in actual purchasing power. But with the specter of hyperinflation looming, it will not be worth the attempt to capture the overshoot. An exit from gold may just capture YOU in the wrong paper at the most wrong time in all of history!
A Functional Change for Gold
Some people call it the spontaneous re-monetization of gold.  They mean that gold will resume one of the three basic monetary functions under the common concept of money. I, on the other hand, call it the complete and final demonetization of gold, meaning gold finally breaks all parity with paper equivalents and trades only in its physical form, trading as the inverse of paper. These re/de-monetization differences are only semantic. We are talking about the same thing. See my three part series titled Gold Is Money for more. 
As gold exchanges its commodity label for that of wealth reserve par excellence, it will mainly replace the debt-asset trade, not the equity or stock trade. But the equity trade will fall by a significant margin as well, in relation to gold, because the frothy debt trade has pushed far too many conservative investors into the risky equity market.
Orbit = Perpetual Levitation
Just as when bubbles pop they stay popped, so too when the ultimate Un-bubble Un-pops it will stay Un-popped!
So how much of your perceived wealth have you locked into a real, solid, "good as gold" wealth reserve? I shouldn't have to say this because it is so obvious, but it is clearly better to "cash out" of the paper game and "lock in" your profits BEFORE the two biggest bubbles in history pop. That way you beat the rush, so to speak.
As for the coming rush, by my back of the toilet paper calculation I figure we will soon witness somewhere between $XXT and $XXXT of perceived 2009 dollar "wealth" capital flow into roughly $XT worth of gold on a global scale. For this reason I created my probability distribution curve:
And for those of you that don't yet understand the difference between Freegold and Hyperinflation (which is apparent through statements like "what good is $100K gold if a roll of toilet paper costs me $100?"), I created this second "purchasing power" distribution curve to clarify my position:
A Final Note
For you new readers and those who are reading this post on other websites, I would like to state for the record that my thoughts are not original. My blog now has 90 original articles written by me dating back to August 23, 2008. They are a record of my journey understanding the writings of the enigmatic Another and FOA, and how they relate to our current crisis. It is to these two anonymous messengers that my blog is a humble tribute.
 The Waterfall Effect
 Gold Price is No Bubble by James West
 The Dutch Tulip Bubble of 1637
 That's Not How Bubbles Work
 2010 READY OR NOT HERE IT COMES Constant prosperity through credit is no more possible than constant peace through heroin
 The Mother of all Bubbles by Peter Schiff 2008
 Why the Global Financial System is About to Collapse
by "John Law" 2006
 Gold is Money - Part 1
 Gold is Money - Part 2
 Gold is Money - Part 3