Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Global Warming ClImate Change Mega Death Trend - 8th Apr 24
Gold Is Rallying Again, But Silver Could Get REALLY Interesting - 8th Apr 24
Media Elite Belittle Inflation Struggles of Ordinary Americans - 8th Apr 24
Profit from the Roaring AI 2020's Tech Stocks Economic Boom - 8th Apr 24
Stock Market Election Year Five Nights at Freddy's - 7th Apr 24
It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- 7th Apr 24
AI Revolution and NVDA: Why Tough Going May Be Ahead - 7th Apr 24
Hidden cost of US homeownership just saw its biggest spike in 5 years - 7th Apr 24
What Happens To Gold Price If The Fed Doesn’t Cut Rates? - 7th Apr 24
The Fed is becoming increasingly divided on interest rates - 7th Apr 24
The Evils of Paper Money Have no End - 7th Apr 24
Stock Market Presidential Election Cycle Seasonal Trend Analysis - 3rd Apr 24
Stock Market Presidential Election Cycle Seasonal Trend - 2nd Apr 24
Dow Stock Market Annual Percent Change Analysis 2024 - 2nd Apr 24
Bitcoin S&P Pattern - 31st Mar 24
S&P Stock Market Correlating Seasonal Swings - 31st Mar 24
S&P SEASONAL ANALYSIS - 31st Mar 24
Here's a Dirty Little Secret: Federal Reserve Monetary Policy Is Still Loose - 31st Mar 24
Tandem Chairman Paul Pester on Fintech, AI, and the Future of Banking in the UK - 31st Mar 24
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Silver and Gold: Balancing More Than 100 Years Of Debt Abuse

Commodities / Gold & Silver 2020 Jun 02, 2020 - 01:14 PM GMT

By: Hubert_Moolman

Commodities

Since the creation of the Federal Reserve in 1913, the stock market has outperformed Gold and Silver significantly. Here is a great chart (from longtermtrends.net) that proves this:


The S&P 500 is in red, the Dow in blue and Gold and Silver in their native colours. The outperformance is huge. Through the debt-based monetary system, the Fed facilitates the extension of credit which disproportionately benefits assets like general stocks and bonds.

During each credit cycle, Silver and Gold prices mostly loses relative value to assets like general stocks and commodities. In other words, inflating the currency supply (inflation) does not benefit Gold and Silver relative to most other significant assets like stocks (the chart above is really the proof of this).

It is only after a certain point in that inflating credit cycle that Gold and Silver are able to catch up. That is normally after significant stock market peaks. This was the case after the 1929 Dow peak, the 1966 and the 2007 Dow peak.

Those stock market declines (from all-time highs) are often the trigger for the deflation of debt (which is the other side of the “balance sheet” for the those inflated assets that are now declining).

Debt is virtually the opposite of Gold and Silver. When debt is deflated, it provides the fuel for Gold and Silver to rise significantly in order to catch up. It is really the balancing of a mathematical formula; the balancing of debt-based monetary system abuse. We are still early in this “catch up”, and Silver and Gold is really still at a bottom when it comes to debt.

How can we know this? Just look at debt levels; it is at or near all-time highs. When debt (bonds) is priced high, then Silver and Gold is low. Or put another way, when interest rates are low (that means debts or bonds are high) then Gold and Silver is low.

In terms of interest rates (or debt) Silver and Gold are at real lows. Here is a Silver chart that proves this:

It features the Silver price multiplied by the interest rate on the 10-year US Treasury. It has just recently hit a new low, even lower than the 1971 low. It is still a long way before Silver is at relatively high prices, and debts at lows (or interest rates at highs), which means this chart will then likely be at all-time highs.

If the February 2020 Dow top is the peak, then we are likely in another catch up phase. Catching up to more than a 100-years of credit abuse that has kept Silver and Gold prices artificially low.

For Silver, it makes the completion of these patterns imminent:

For more on this, and similar analysis you are welcome to subscribe to my premium service. I have also recently completed a Silver Fractal Analysis Report as well as a Gold Fractal Analysis Report.

Warm regards,

Hubert

“And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved”

http://hubertmoolman.wordpress.com/

You can email any comments to hubert@hgmandassociates.co.za

© 2020 Copyright Hubert Moolman - 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.


© 2005-2022 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