What Crisis Is The Gold/Oil Ratio Predicting This Time?

Tyler Durden's picture




 

The number of barrels of oil that a single ounce of gold can buy has never, ever been higher.

 

 

For the last 30 years, when the ratio of gold-to-oil spikes, something systemically serious occurs globally (as opposed to the usual bullshit "this is transitory" statements).

 

So what happens next?

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Sun, 01/17/2016 - 21:23 | 7060243 Davilis
Davilis's picture

It's saying sell gold and buy oil.

Sun, 01/17/2016 - 21:25 | 7060253 Newsboy
Newsboy's picture

"What happens next?"

Uh, gold-standard?

Sun, 01/17/2016 - 21:32 | 7060267 order66
order66's picture

Simple math:

Non Performing Shale Loan Explosion + Subprime Car Loan Meltdown + Student Loan Default Wave + China Wheels Up Landing = Next.

Sun, 01/17/2016 - 21:36 | 7060288 OrangeJews
OrangeJews's picture

Soon you'll need to take that chart and stack it on itself about 30 times.

Stack that phyz!

Sun, 01/17/2016 - 21:42 | 7060322 tmosley
tmosley's picture

Dollar partition.

Sun, 01/17/2016 - 21:45 | 7060330 0b1knob
0b1knob's picture

How is the ratio of liquified dinosaur poop to shiny lead any more relevant than the ratio of Peking duck to duck butter?

Sun, 01/17/2016 - 21:54 | 7060351 Never One Roach
Never One Roach's picture
Coming Recession 'Much Worse' Than 38 Percent Drop

 

http://www.newsmax.com/Newsfront/Michael-Pento-Recession-2008-economy/20...

Sun, 01/17/2016 - 22:05 | 7060378 Automatic Choke
Automatic Choke's picture

ob1 - try driving back and forth to work without your liquified dinosaurs.  you may not think it important, but it is a commodity with a very inelastic demand curve....it is in glut because we have a fairly thin margin of excess production, but it is not a stockpiled commodity, and if anything interrupts flow, price will skyrocket.   stack a few 55 gallons in your backyard (or use DBO to do equiv.)

 

Sun, 01/17/2016 - 22:12 | 7060401 KesselRunin12Parsecs
KesselRunin12Parsecs's picture

"So what happens next?"

 

The next person draws some squiggly lines on a chart, publishes it, & gets paid for it while clowns like us think up sarc-y replies on our way home from boating trips

Sun, 01/17/2016 - 22:23 | 7060431 nope-1004
nope-1004's picture

Last 30 years have been an economic experiment backed by a MIC and manipulated by a Fed, meanwhile .gov cooperated with a terrorist cartel.  By no means is that a normal economic condition, nor one that can last.

Call me crazy, but the chart only shows me how we are close to the end of a grossly mispriced petrodollar, and nothing else of substance (other than the wookie comment below :-o ).

 

Mon, 01/18/2016 - 00:12 | 7060654 Jam Akin
Jam Akin's picture

What happens next is we learn that gold is actually much more useful in new energy and propulsion systems than fossil fuels are.

Mon, 01/18/2016 - 03:47 | 7060870 Bokkenrijder
Bokkenrijder's picture

So which one is it? Is gold expensive, or is oil cheap?

Mon, 01/18/2016 - 04:10 | 7060889 TheFutureReset
TheFutureReset's picture

At this exact moment? Those metrics will change violently throughout the year. Gold will win eventually, but immediately? Oil is oversold. We are due a dead cat bounce to 35 or so, just to get all the Muppets good and lined up for the skinning machines. Only then is gold bid up 100%, while oil crashes to 20.

Mon, 01/18/2016 - 06:04 | 7060966 saveandsound
saveandsound's picture

When the oilprice stays low, the goldprice will follow.

Therefore the question of the day is "Will the oilprice stay low?". The other question is "When is the goldprice going to follow?".

jm5c 

Mon, 01/18/2016 - 08:25 | 7061106 Save_America1st
Save_America1st's picture

3 G's, bitchez:

 

Guns

Gold

and a Getaway Plan!!!

And just keep stacking the deal of the century:  phyzz silver

Mon, 01/18/2016 - 09:39 | 7061265 SoilMyselfRotten
SoilMyselfRotten's picture

Looking at the graph, doesn't it look like a sure bet on the other side of that peak? At this point it could be a war on the other side.

Mon, 01/18/2016 - 09:51 | 7061306 WordSmith2013
WordSmith2013's picture

THE BIGGEST BUBBLE EVER IS BURSTING—BIG TIME!

 

http://stateofthenation2012.com/?p=29398

Mon, 01/18/2016 - 09:36 | 7061266 Nutsack
Nutsack's picture

How many pounds of Silver is too much?

Mon, 01/18/2016 - 10:04 | 7061372 tmosley
tmosley's picture

Need to keep less than the amount it would take to collapse into a black hole under its own gravity.

Mon, 01/18/2016 - 10:03 | 7061365 tmosley
tmosley's picture

Oil will only stay low until all these frackers and such have gone bankrupt and stopped producing altogether.

Getting closer now. I'd say we will hit the low twenties before the supply falls enough to turn this thing around. Demand is simply too low now--production has to fall below what it was before the fracking and tar sand revolutions for it to really start rising again, I think. Harder with Iran quadrupling output.

Mon, 01/18/2016 - 08:44 | 7061141 El Dorado
El Dorado's picture

This must of been the inconvient truth that Al Gore spoke of in his movie. 

Mon, 01/18/2016 - 10:05 | 7061375 F22
F22's picture

I agree, the ratio is headed to 1000:1

Buy your physical gold while it's still on sale....

Sun, 01/17/2016 - 21:37 | 7060275 CPL
CPL's picture

Silver was under $9 and gold was under $800 last time.  Which when it happens again a pound of ground beef will be more valuable than silver and an ounce of gold will get you a shitty TV.  When this shits the bed again, by the way it's been designed, it will be the excellent opportunity to highlight the failure of PM's as a currency technology once the actual tally ends up being revealed by accident because of the massive amount of failures to deliver under central bank charters (they gunna go tits up).  PLUS inflation worked in, anyone holding it isn't getting their money out of it let alone understand the transaction value if that's the only money around.

Sun, 01/17/2016 - 21:39 | 7060307 Everyman
Everyman's picture

And CASH in your scanario is better than PMs?  HOW?

Sun, 01/17/2016 - 22:08 | 7060380 rbg81
rbg81's picture

I've been thinking for years that CASH is going to CRASH.  With Governments all over the world printing it like Monopoly money, how could it be otherwise?  But logic seems to be going out the window.  Which tells me we are in the Mother-Of-All-Bubbles.  So far I've paid a big price for my convictions, but it's always darkest before the dawn.  At least, that's what I tell my wife.

Sun, 01/17/2016 - 22:09 | 7060391 Everyman
Everyman's picture

me 2.  I am in that club with ya.

Sun, 01/17/2016 - 22:19 | 7060427 SuperRay
SuperRay's picture

Keep the faith fellas. Reality has been so taboo for so long, and so many kool-aided zombies are walking among us, that our belief in the truth of reality is being tested. You've been right all along, and it's about to be proven.

Sun, 01/17/2016 - 23:31 | 7060579 Jethro
Jethro's picture

Can you imagine a scenario where Sanders gets elected, and the currency goes tots up?  Instant Venezuela.. 

Mon, 01/18/2016 - 00:16 | 7060663 BarkingCat
BarkingCat's picture

If Sanders gets elected, the currency might go tits up but the general population is going tits down....meaning getting anally raped and hard.

Mon, 01/18/2016 - 07:45 | 7061059 10mm
10mm's picture

Im starting to see Bernie signs in peoples windows. And the FSA isn't delegated to the hood.

Mon, 01/18/2016 - 08:27 | 7061112 Save_America1st
Save_America1st's picture

just keep stacking supplies:  guns, ammo, food, water, gold, silver, medical supplies, fishing/hunting/camping supplies, etc.

Like the saying goes about when the shit hits the fan:  It's better to be a year too early than to be 10 minutes too late

Keep stackin', bitchez

Mon, 01/18/2016 - 09:32 | 7061255 rpboxster
rpboxster's picture

"Im starting to see Bernie signs in peoples windows. And the FSA isn't delegated to the hood."

 

That's the college kids being home on break.

Mon, 01/18/2016 - 09:38 | 7061270 KesselRunin12Parsecs
KesselRunin12Parsecs's picture

The college kids who think Trotsky was cool.

Sun, 01/17/2016 - 23:51 | 7060617 FlipFlop
FlipFlop's picture

"keep your faith"

:)

Sun, 01/17/2016 - 22:46 | 7060496 Hedger4Life
Hedger4Life's picture

When you are a man who allocates all his savings into gold particularly phyz. I presume this is usually bcos a) it is the most durable and safest investment which can withstand all types of upheavals and changes b) You believe the fiat system is fraudelent and over the longterm you believe that Gold will outperform.

As you are conscious of the fraud, then you may expect price suppressions and price declines. But it is impossible to keep the ball pressed under the water and Gold will have its bull markets. And yuuge they will be.

You are not speculators. Rather storers of wealth. And a store that you believe is the antidote to the fiat system which fleeces the flock.

It is implicit that the waiting period is frustrating but you are not speculating. You are invested.

As always when value investing it is best to buy low. I do feel sorry for some people that bought after 9-10 years of a bull market and also expected safety and triple digit returns on their 'investment'. That was not particularly sensible. I believe it stands to reason that the price of most asset classes will fluctuate and it can be better to wait for price declines and bear markets when seeking to invest.

Again there are always exceptions and no perfect formula. If fiat collapses in a week. Then having bought any physical commodity at virtually any price would have been good business.

Mon, 01/18/2016 - 06:52 | 7061004 OverTheHedge
OverTheHedge's picture

For me,it is the least dirty shirt -I don't actually like owning gold, but I absolutely refuse to hold anything else, including cash. I'm of the opinion that it is better to have something, anything rather than savings, so lots of tools and toys for me, and what's left over is shiny. If I'm wrong, I've still got a full toolshed, and a pretty doorstop.

Mon, 01/18/2016 - 08:23 | 7061103 Hedger4Life
Hedger4Life's picture

O.T.H I guess I didn't say this originally.

1) Fiat, bank deposits, and markets are not to be trusted. Therefore owning physical gold, silver, platinum is certainly the best option.

It is almost self explanatory over the long term in a fractional reserve banking system which creates 'money' as debt. Ie it makes debt as debt but for the doublespeak. The engine of this system needs a fuel called increasing debt supply, increasing money supply. This system dies without it. Therefore the value of increasingly numerous usd notes and other currencies will lose in contest with an asset like precious metals that are far more difficult to produce and far more difficult to debase their value through over supply. Gold will emerge victorious plus a shinny ribbon. A no contest.

The defining issue is whether you bought at $275 or $550 or $1000 or $1500 or $1921 all time nominal high.

At the end of the day the prevailing price of Gold is up until now set around market rates. There is no fighting that yet atleast. So the i guess the goal for all of us is to get in or have got in at as good a price as possible. 

It obviously makes considerable difference at which price you buy. If in a decade we hit $6000 for arguments sake - the guy in at $275 is up almost 2000% on his fiat whereas he who bought at $1900 is up 300% on his fiat.

Btw anyone holding losses on Gold at this point is still doing better than practically every other commodity metal and energy. Most are down 65-85% off recent highs. Gold only around 40%. Either there could be more downside or it is a case of strength in gold and demand. What we know is that TPTB are crushing commodities.

 

Mon, 01/18/2016 - 00:30 | 7060686 natxlaw
natxlaw's picture

Me 3, down about 20% over two years, and keeps getting worse. Hey, I can hold this play out for 8 more years. Hey, if they can keep this charade up for 10 years, I'll just figure they can keep it up for 100.

Mon, 01/18/2016 - 08:20 | 7061099 Eyeroller
Eyeroller's picture

Me 4. "The markets can stay irrational longer than you can stay solvent."

Mon, 01/18/2016 - 04:15 | 7060893 TheFutureReset
TheFutureReset's picture

@rbg81 banks don't print physical cash when they participate in QE. CPL is on to something, because physical cash will be in high demand when the capital controls hit. That's ore-collapse territory, and transitory for sure, but cash is needed. PMs will win eventually.

Mon, 01/18/2016 - 06:05 | 7060968 gatorengineer
gatorengineer's picture

Spot on.

Mon, 01/18/2016 - 08:24 | 7061104 Bullionaire
Bullionaire's picture

Nope. When capital controls hit, cash will be outlawed, because the terrists. All transactions via your GI Bern card. Or junk silver on the black market.

Mon, 01/18/2016 - 09:09 | 7061200 ATM
ATM's picture

When capital controls hit the people will say fuck off and still use cash because that is what they have and we have been conditioned to believe it has intrinsic value.

The only way cash will lose its utility is in a destruction of the currency and that won't come until the hyper inflation hits.

Until then it is smart to keep some physical cash on hand.

Sun, 01/17/2016 - 22:59 | 7060520 10mm
10mm's picture

I'll beat you in the head with gold before beef

Mon, 01/18/2016 - 00:30 | 7060685 A tumor named Marla
A tumor named Marla's picture

If it gets that far, what makes you think there will be ground beef available?

Gold and silver in my opinion are really more for the post – insanity. Once basic survival is more predictable again, and systems begin to develop, a pricing structure will develop. This is when smart people by entire blocks of factories with an ounce of gold.

Mon, 01/18/2016 - 04:17 | 7060897 TheFutureReset
TheFutureReset's picture

I hope so. I've waited a long time. And my stacks want to buy something nice. 

Sun, 01/17/2016 - 21:37 | 7060286 remain calm
remain calm's picture

Obama leaves Wookie and falls in love with Caitlyn.

Sun, 01/17/2016 - 21:48 | 7060335 Everyman
Everyman's picture

EWWWWW!  I do not like that image in my brain!!!!

Well (s)he HAS a GOLD medal!!!!

Sun, 01/17/2016 - 21:55 | 7060353 Never One Roach
Never One Roach's picture

Reggie gets pregnant.

Sun, 01/17/2016 - 22:00 | 7060365 knukles
knukles's picture

And our "Representatives"* at Davos are all consumed alive by a MotherSHip load of Reptilians who drop by for a quick piss-stop and snack on their way back to the Pleiades star system 
(I hope I hope I hope)

*Honest to fucking God, that's what they call themselves ... "Representatives"
Assholes

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