We'll know gold is overcrowded when . . .
For the long-gold trade to really become too crowded, certain events will need to occur:
Goldman Sachs (GS, news, msgs) will have had "bus tours" to a bunch of mines, like the tours it and other companies have arranged for different industries, particularly technology.
The public will have to be involved in a major way, and we'll see ads on Bubblevision encouraging people to buy gold instead of prodding them to sell their jewelry, as is the case these days.
Banks will need to find a way to put money into gold -- because no modern mania has ever ended without the banks finding a way to lose money in it.
We will most likely need to see a frenzy of mergers and acquisitions, and a leveraged buyout or two.
Last, BusinessWeek will have to put gold on the cover, telling us how it's the wave of the future, or some variation of that theme.
I put this list together somewhat tongue-in-cheek, but over the past couple of decades, most of these events have occurred before a big mania has ended -- be it energy in the late 1970s and early '80s, stocks in the late 1990s or real estate in the middle of this decade.
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