Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Gold Price Setting Up Just Like Before COVID-19 Breakdown – Get Ready! - 27th Sep 20
UK Coronavirus 2nd Wave SuperMarkets Panic Buying 2.0 Toilet Paper , Hand Sanitisers, Wipes... - 27th Sep 20
Gold, Dollar and Rates: A Correlated Story - 27th Sep 20
WARNING RTX 3080 AIB FLAWED Card's, Cheap Capacitor Arrays Prone to Failing Under Load! - 27th Sep 20
Boris Johnson Hits Coronavirus Panic Button Again, UK Accelerting Covid-19 Second Wave - 25th Sep 20
Precious Metals Trading Range Doing It’s Job to Confound Bulls and Bears Alike - 25th Sep 20
Gold and Silver Are Still Locked and Loaded… Don't be Out of Ammo - 25th Sep 20
Throwing the golden baby out with the covid bath water - Gold Wins - 25th Sep 20
A Look at the Perilous Psychology of Financial Market Bubbles - 25th Sep 20
Corona Strikes Back In Europe. Will It Boost Gold? - 25th Sep 20
How to Boost the Value of Your Home - 25th Sep 20
Key Time For Stock Markets: Bears Step Up or V-Shaped Bounce - 24th Sep 20
Five ways to recover the day after a good workout - 24th Sep 20
Global Stock Markets Break Hard To The Downside – Watch Support Levels - 23rd Sep 20
Beware of These Faulty “Inflation Protected” Investments - 23rd Sep 20
What’s Behind Dollar USDX Breakout? - 23rd Sep 20
Still More Room To Stock Market Downside In The Coming Weeks - 23rd Sep 20
Platinum And Palladium Set To Surge As Gold Breaks Higher - 23rd Sep 20
Key Gold Ratios to Other Markets - 23rd Sep 20
Watch Before Upgrading / Buying RTX 3000, RDNA2 - CPU vs GPU Bottlenecks - 23rd Sep 20
Online Elliott Wave Markets Trading Course Worth $129 for FREE! - 22nd Sep 20
Gold Price Overboughtness Risk - 22nd Sep 20
Central Banking Cartel Promises ZIRP Until at Least 2023 - 22nd Sep 20
Stock Market Correction Approaching Initial Objective - 22nd Sep 20
Silver Bulls Will Be Handsomely Rewarded - 21st Sep 20
Fed Will Not Hike Rates For Years. Gold Should Like It - 21st Sep 20
US Financial Market Forecasts and Elliott Wave Analysis Resources - 21st Sep 20
How to Avoid Currency Exchange Risk during COVID - 21st Sep 20
Crude Oil – A Slight Move Higher Has Not Reversed The Bearish Trend - 20th Sep 20
Do This Instead Of Trying To Find The “Next Amazon” - 20th Sep 20
5 Significant Benefits of the MT4 Trading Platform for Forex Traders - 20th Sep 20
A Warning of Economic Collapse - 20th Sep 20
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Gold Alarm!

Commodities / Gold & Silver 2009 Oct 30, 2009 - 01:56 AM GMT

By: Adam_Brochert

Commodities

Best Financial Markets Analysis ArticleThe paperbugs need to fear the future. It is coming. It is inevitable. It is not gloom and doom, it is not guns and food in a wilderness cabin, it is not the end of the world, and it is not the inflation or deflation debate. It is simply a Gold bubble.


Of course, when I say that it is a Gold bubble, what I mean is that the Gold bubble has just begun. This occurred when Gold broke out above $1000 strongly, to create $1000/oz as a floor for Gold rather than a ceiling. This clears the way for much higher Gold prices. I don't mean to misrepresent myself as a prognosticator, as we are all just bozos on the speculation bus, but I think the path is now clear for Gold to go much higher. I believe that $2000/oz. is a conservative target for Gold, but $3000-$10,000/oz. wouldn't shock me. In any case, I use the Dow to Gold ratio to guide my thoughts and decisions. I believe the Dow to Gold ratio will reach 2 at a minimum and less than 1 this cycle wouldn't be surprising.

While I place no faith in the government to do anything correctly or in "the people's" best interest (I am not a paperbug that believes in magic government powers, after all), I do recognize the bureaucratic power to destroy a currency. Will they succeed or will we have a Prechterite crash that causes the U.S. Dollar to rise to heights unimagined? These are interesting academic exercises to me, but I am no longer interested in the academic.

What I know is this. The US Dollar provides unacceptable risk and doesn't compensate its holders to take that risk. Period. Cash is king, but one had better hold the correct form of cash! The US and UK are on a crash course with reality and I doubt, if history serves as a reliable guide, that the outcome will be pretty.

Stocks, real estate and corporate bonds are toast, and everyone knows it. In fact, those who invest in such assets are relying on governments to bail out the system many times more. When's the last time that relying on governments to do the right thing made for a wise investment decision over the longer term?

That leaves us with commodities. But the ironic thing is that commodities don't usually do well when the economy is moribund. Sure, they can do well if inflation is rampant and out-of-control, but this is a wish and not a guarantee.

I have cast my lot with Gold. It is an international currency and reflects a cash holding that cannot be debased by government decree or apparatchik stupidity. Is Gold money? Some say it cannot be spent at a Wal-Mart and thus is not money and yet go on to recommend government bonds or Swiss Francs in the same article! When's the last time you used Treasury Bills, foreign currency or stocks to pay for groceries in the United States? If Gold wasn't money, governments wouldn't hoard it and list it on their balance sheet as money.

Anyhoo, Gold is on the threshold of a MAJOR move higher in my opinion. This is not inflation or deflation or anti-Dollar, this is a secular bull market set to enter its mania phase. Gold has been on the rise steadily for ten years. Did I mention that it has trounced stocks, cash, and T-Bonds over the last decade? That's right, over a 10 year period, a piece of "worthless" metal has outperformed stocks. How can Bloomberg and other Wall Street mouthpieces take themselves seriously since this is the case?

Really think about the implications of this fact: Gold has outperformed stocks for 10 years (actually more, but let's stick with an indisputable fact to keep randy paperbugs from trying to argue on a technicality). A piece of metal is a better investment than a bunch of really smart guys with ties and computers. What does this mean?

Don't underestimate Gold here. Don't underestimate the cyclical and secular bull market that continues to astound the critics while remaining a hated and much-maligned asset class. You want love? Go watch CNBC. You want acceptance? Buy what Cramer tells you to buy. You want to make money? Buy an asset class that has gone up only 4 fold in the last decade, is at all time highs, and is hated by mainstream media sources. Every time Gold drops $10/oz., some clown from "traderbank" or some other unknown or even a known outfit has a sound reason why the Gold bull market is over.

From your experience, whatever it may be, does this sound like the way bull markets end? Does anyone remember the dot.com boom? Does anyone remember the oil and real estate bubbles? By the way, watching those who are still touting the oil and real estate bubbles is actually a good exercise. Listen to their wonderful arguments that are based on "sound" fundamental principles and then spook the reality: every asset class has its time under the sun. It is simply Gold's turn.

Gold is not a religion to me, though it is my passion to spread the word of where to put your money. Oil goes up 14 fold over ten years and then collapses. Gold only goes up 4 fold in 10 years, but now it is supposed to collapse without the final mania phase? Yeah, right. And I should buy stocks right now at the top for the long haul, right?

Here's a current 6.5 year daily chart to show you where I think we are in this current intermediate-term Gold bull market thrust, which is not over in my opinion. This ain't mainstream, people. This is calling for a bubble in a freakin' piece of metal. And believe me, investing in Gold is the optimistic scenario. I in no way would invest in Gold if I thought society was about to collapse. In the 1970s, Gold went up 24 fold and society didn't collapse. Investing to me is all about accepting that various asset classes fall in and out of favor. This is what the Dow to Gold ratio is all about. I am not advocating trying to eat Gold, oil, stocks or paper currency instead of food! Without further rambling, here's the Gold chart with my thoughts:


I think we hit $1200-$1600 before spring is over. Could I be wrong? Of course! Could the Gold bull market be over? No. Not possible. An asset class bull market does not end with an absence of public participation and mainstream media scoffing. We are just getting warmed up. The herd still wants to buy Apple, not Gold. Have you purchased any physical Gold yet?

Visit Adam Brochert’s blog: http://goldversuspaper.blogspot.com/

Adam Brochert
abrochert@yahoo.com
http://goldversuspaper.blogspot.com

BIO: Markets and cycles are my new hobby. I've seen the writing on the wall for the U.S. and the global economy and I am seeking financial salvation for myself (and anyone else who cares to listen) while Rome burns around us.

© 2009 Copyright Adam Brochert - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules