This page has been archived and commenting is disabled.
"Oil Cheap Or Gold Rich" Answered (For Now)
A week ago we noticed something extreme in the price relationship between gold and oil. At the time we asked "is gold rich or oil cheap?" It appears we have our answer... perfectly tagging the January highs in the gold/oil ratio, the screaming rally in oil has pushed the ratio back into a less extreme region...
From a week ago...Is Oil Cheap? Is Gold Expensive?
And now...
The same level we saw in early 2009 before oil surged...
And in the last few days post FOMC Minutes, the oil-USD correlation regime has shifted dramatically...
So does Oil have further to run? or is gold set for a renewed drop?
Charts: Bloomberg
»
- 20209 reads
- Printer-friendly version
- Send to friend
- advertisements -
The ratio is whatever the Fed wants it to be.
Both gold and oil prices are severely manipulated. Victory is now won in financial markets using HFT computers and by infinite NSA spying
ha yeah seriously, it's pretty much impossible to make rational arguments in an irrational environment. Same reason why schiff is the worst for defending gold because he insists that there is no manipulation and everyone is just being "fooled" by the fed.
I've heard that bullshit theory between gold and oil my whole life.
It is nothing but a lie designed to keep people in the dark about other bigger issues like printing money, massive debt and hidden inflation.
The ladder. That is to say the latter.
Bay of Pigs: Absolutely. It's the old "Lies, Damn Lies, then Statistics."
he insists that there is no manipulation
Peter Schiff harbors political ambitions. If you ever speak the truth about markets, or say, 9/11, you have no political future in the land of the free.
Now a neocolonialism is enforced through total control of financial and commodity markets and backed up by infinite spying and blackmail and a controlled "free and fair" Weatern media. Putin quickly found out how effective US can be at doing that.
That the Chinese suspended Citadel, the unofficial arm of the Fed, from trading in China is no coincidence
Yup. Natural market gyrations. Saudis invading Yemen has nothing to do with it.
Erratic Patterns - (YT video)Look at the pattern,
Can you see what's wrong?
It's supposed to be perfect but,
But really it's not.
Can you find the flaws,
Hidden in structured code,
Hiding in the pattern,
In between the rows?
Only illogics can find,
Hidden flaws in a straight logic line.
Only erratics recognize,
Errors in patterns of a perfect design.
Now that you know,
That something's not right,
look at it carefully,
In pale logic light.
Don't be sorry,
If you can't recognize
the errors and faults,
is such a perfect disguise.
Only illogics can find,
Hidden flaws in a straight logic line.
Only erratics recognize,
Errors in patterns of a perfect design
Measuring the price of one manipulated commodity to another manipulated commodity is not going to give a good indication, especially as the WTI price quotations only go back to 1948. Better to use a historical model of the purchasing price of gold. One of the oldest price measurements we have for an item, pretty much made the same way now as it was then, is for a Single Action Army pistol in caliber 45 Long Colt manufactured by Colt Firearms (colt.com) with a 5 1/2 inch barrel and case hardened blue finish. The MSRP has historically been a $20 US Double Eagle (.9675 troy ounce of gold). The MSRP today in Federal Reserve Units is $1499. Doing the math on my napkin indicates that gold is roughly 27% below it's historical purchasing value over the past 142 years or so, all due to the manipulation of the price of gold and Federal Reserve Units.
++
I'm just going to keep stacking my barrels either way.
Naw! No manipulation here! Move along!
(Damned conspiracy theorists...)
Fofoa has noted in the past that when the gold oil rtio reaches the extremes it stresses the system. Interesting things happen at those extremes.
He believes there is a need to keep major producers happy and when they can't be kept happy they do things.....
Well, I've always had a deep respect, and I mean that most sincerely.
The band is just fantastic, that is really what I think.
Oh by the way, which one's FOFOA?
Well, what's "in the past" really? The direct link between oil and gold was severed in the early 70's, so there should not be a direct connection between the oil price, the gold price, and stress on the economy.
If you have the link to the specific article on his site I would love to have another look though, I am a big fan of FOFOA
.
Fofoa also believes silver isn't money ...
Good. Silver isnt money. It's a commodity with huge industrial uses. Why in god's name would you want to save in a needed commodity?
That's why humans have been moving silver further and further from monetary usage.
Gold does it and does it better and in a smaller package.
So, maybe I shoulod sell my gold and buy some oil?
Noooo...I don't think so.
it would be less of a loss
Believe at your peril any official data on supply and demand of anything traded on a futures exchange.
Ok, I'll stick my neck out.
Oil is cheap AND gold is cheap. The ratio should remain about the same as the dollar price tags go up on each. The relationship probably made more sense when the dollar was actually backed by gold and oil was traded in the market in dollars. Solving the equation, gold was traded for oil more linearly. Today? Who knows?
It's all commodities (including gold and silver). Is the M2 velocity increasing due to ChiCom US Treasury $'s repatriated?
I think some confusion exists when considering the sale of foreign held USTs. But I do think VELOCITY increases.
The bond still exists, it just has a new owner. So dollars were not dumped into M2 with the sale. This only happens when the bond is settled at the Fed and dollars are paid out at maturity. Even if the Fed bought the bond, the bond still represents dollars not in circulation.
The question is: what is the old owner of the bond doing with the cash they have liberated? If they bought Yuan with it, they have tightened (strengthened) the Yuan. If they put dollars into the U.S. Stock market, they have driven demand (stocks up) for equities. If they buy HoHo's with it, the HoHo factory might need more employees, etc. the amount of dollars in M2 has stayed constant in these examples, however.
In terms of China's sales of UST, the shear volume should distort the market where they are putting capitol. My theory is US Equities based on the seemingly paradoxical bear market rally.
Also, this is the best political solution for China. "We have sold your USTs, but have bought your stocks."
"We have sold your USTs, but have bought your stocks."
fed is only buying 15 bil a month in bonds, so essentially china has become the newest fed proxy to pump up the stocks at the rate of $100 bil a month (or whatever rate they sell them)....that explains this weeks stock actions
There is no "ratio" between gold and oil. It's just a number that some analysists have made up to try and make themselves look intelligent.
Oil is a commodity where production is almost 100% consumed. Gold is a commodity where only 15% of annual production is consumed by industry, and even then, much of that is eventually recovered. They're trying to compare apples and pineapples, and then telling us there's a correlation.
The big movements in the ratio are a reflection of QE counterfeiting, that's all. We're due for more counterfeiting.
Supply/demand morons.
Saudi keeps pumping so price goes down. Probably even more due to slowdown in China. Will oil rebound quickly on Saudi drop in production? Probably.
Gold is no longer any kind of hedge. Gold is jewelery. No one is manipulating anything. Gold will fall to under $1000/oz soon.
They are not going to let Gold find it's true value because it would expose the Ponzi that supports the dollar.
The western world's flight to Gold and away from the dollar would already be on fire if it weren't for the fears of contagion. It would likely cost 100 barrels for an once of Gold, before it was under 25, in a free market. Pumping oil out of the ground is far easier then mining Gold and there's vastly more of it.
As long as the markets are under the FEDs control Gold will only rise as Oil heads back to $100 a barrel, were they want it.
It's no different then the price of Diamonds being artificially set, not to mention WATER!
How the hell they convince us that plentiful resources are scarce and valuable, while telling us Gold is not, is impressive.
The power of propaganda to sway mobs of people to blindly follow is scary, the day they lose control and the people's eyes are opened will be terrifying for the Elite!
When the Fort Knox/Fed Vault flimflam is finally exposed, it will be as if NYC and DC were nuked!
All correct except for "the people's eyes are opened will be terrifying for the Elite!". If the eyes of the people are opened, then it will be too late, for supplies of basic necessities will be scarce except for the elite. People will be eating their babies at some point as it has happened in past history. Very sad. I do hope that the internet is working so we can view the White House burning; serious, but not serious.
That was kinda the point, the white House will burn, along with the super rich neighborhoods within a stones through of the suburbs and the banks who robbed us.
That's why they're investing in safe havens and Islands.
When confidence is gone and the propaganda machines grind to a halt there will be no corner cafes with the powerful sipping tea under a cabana.
All but the most powerful who have a castle to hide in and an army to guard it will be found hiding in a hole and hung from the nearest stair well like Saddam Hussein, who was one of the middle east's richest men, and suffered the wrath of his own people, after America ran off his protectors.
Left unchanged at the pump; where it counts for the "average Joe".