The prices of gold, platinum, and silver are important and communicate valuable insights. Consider the price of monthly gold for 20 years – log scale below.
Ignore the daily and weekly gyrations, forget the self-serving pronouncements from Goldman, do not trust the paper-pushers at the Fed, and look at the big trends in the price charts.
|Aug. 1971||$42.7 (when Pres. Nixon did the deed)|
Examine the gold to platinum ratio, based on monthly data, and look at the big trends.
Ratio Up 1975 – 1980: During the inflationary 1970s, fear rose, confidence decreased, investors distrusted bonds and stocks, while commodities and oil prices rose. Gold was stronger than platinum.
Ratio Down 1980 – 2000: The “age of paper” gave the US a massive rally in stock and bond prices while gold, silver and commodities languished. Crude oil dropped under $11.00 in 1998. Gold was weaker than platinum.
Ratio Flat 2000 – 2008: Prices for gold, silver, stocks, oil and more rallied and fell. The financial crisis of 2008 shook everyone.
Ratio Up 2008 – 2016: Stocks and bonds rallied from crash lows, financial fears surfaced again, gold rallied and fell, and platinum and silver fell hard after 2011. But the rally in the gold to platinum ratio shows that gold is increasingly desired as the global paper Ponzi scheme weakens and confidence in governments and central bankers declines.
Examine the silver to platinum ratio, based on monthly data, and look at the big trend.
The trend has been up since about 2000. Silver prices have been crushed several times and have recovered. The paper Ponzi scheme slowly drives investors toward physical silver.
Examine the silver to gold ratio, based on monthly data, and look at the big trends.
Note the low prices shown for silver in 1991, 2003, 2008 and December 2015 as indicated by coincident lows in the silver to gold ratio. We can see that:
Alan Greenspan on the return to a Gold Standard:
“If we went back on the gold standard and we adhered to the actual structure of the gold standard as it existed prior to 1913, we’d be fine. Remember that the period 1870 to 1913 was one of the most aggressive periods economically that we’ve had in the United States, and that was a golden period of the gold standard. I’m known as a gold bug and everyone laughs at me, but why do central banks own gold now?”
|$20 in paper||or||An Ounce of Silver|
|EU Eurocrats||or||Elected Government|
|Paper and digital bubbles||or||Physical gold and silver|
The choices should be easy.
Courtesy: Gary Christenson – The Deviant Investor
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