What Crisis Is The Gold/Oil Ratio Predicting This Time?
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?
(24 votes)
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It's saying sell gold and buy oil.
"What happens next?"
Uh, gold-standard?
Simple math:
Non Performing Shale Loan Explosion + Subprime Car Loan Meltdown + Student Loan Default Wave + China Wheels Up Landing = Next.
Soon you'll need to take that chart and stack it on itself about 30 times.
Stack that phyz!
Dollar partition.
How is the ratio of liquified dinosaur poop to shiny lead any more relevant than the ratio of Peking duck to duck butter?
http://www.newsmax.com/Newsfront/Michael-Pento-Recession-2008-economy/20...
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.)
"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
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 ).
What happens next is we learn that gold is actually much more useful in new energy and propulsion systems than fossil fuels are.
So which one is it? Is gold expensive, or is oil cheap?
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.
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.
And CASH in your scanario is better than PMs? HOW?
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.
me 2. I am in that club with ya.
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.
Can you imagine a scenario where Sanders gets elected, and the currency goes tots up? Instant Venezuela..
If Sanders gets elected, the currency might go tits up but the general population is going tits down....meaning getting anally raped and hard.
"keep your faith"
:)
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.
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.
@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.
I'll beat you in the head with gold before beef
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.
I hope so. I've waited a long time. And my stacks want to buy something nice.
Obama leaves Wookie and falls in love with Caitlyn.
EWWWWW! I do not like that image in my brain!!!!
Well (s)he HAS a GOLD medal!!!!
Reggie gets pregnant.
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
They represent the Lollypop Guild.
Now, if ISIS/ISIL wanted to make it to the varsity team, they would take a Swiss vacation.
I forgot about the annual meeting of sociopaths knuks.
Soooo, are we all heading to the location of our last boating mishap?
Davilis...You wrote that "It's saying sell gold and buy oil".
That is correct...in normal times.
Gold either is overpriced or either Oil is underpriced or perhaps it is a mixture of both?
But these times are far from normal.
But you did not consider the THIRD VARIABLE in this relationship...the value of the Almighty US Dollar.
Can another possibility be that the US Dollar is way overpriced, Gold is underpriced, and Oil is even more underpriced in the terms of existing US Dollars?
When they allowed the US Dollar to "float" back in the early 1970's they removed a yardstick against which measurements were made.
The problem is that you are using pre 1971 Financial Strategies in a World in which Mark to Market has been all but totally abandoned.
And the crisis to follow this relatively stable time will be your rude awakening that it does not work that way any longer.
Good luck. You will need it as you have failed to adapt.
TT, if I may, what do you see in the next 5 years as being a strong hedge? Cash, pm's, foreign currencies, russian oil? I'm able to move some money, but just don't know exactly where. My folks are good, and I'm single, no kids... late 30's.
I'm not TT, but... Pay off debt, downsize your life as much as possible, PMs, cash, bitcoin, guns and bullets, an RV just in case. Also buy new stuff you might have a hard time finding or that you might need over the next year or so. JJoin a local CSA (community supported agriculture, basically contracts with local farmers).
TT excellent response.
I hear it saying buy all the tangible assets you can get your hands on. PM's, land, preferably productive land and fine art. I don't even trust paper oil because paper oil has to be paid off in paper money. Doom I tell you doooooom!
But this time is different.
/sarc
Has the World Reserve Currency ever been hyperinflated?
Hyperinflation has been restricted to regions where there has been some chance of escape.
I do not know...PERIOD.
But I believe that these are not normal times.
TT. No not like this. We are on completely uncharted waters. All previous reserve currencies were backed. That is why they were adopted as reserve currencies. The earliest 'reserve' currencies were adopted simply because the coin was minted with a consistent weight and purity that people could depend on.
The Romans had a kind of regional reserve currency on a much smaller scale. They diluted their currency and the hole thing collapsed. Their counterparts in the east, the Byzantines did not dilute their money, used sound banking practices, no fractional reserve banking, and went on for hundreds of years after the Romans.
There is a pretty good article about the history of reserve currency on this obscure web site called Zerohedge. Here is the link. http://www.zerohedge.com/article/history-worlds-reserve-currency-ancient...
As gold will be manipulated till they dont care anymore just like oil
Paper gold gets hammered. Not sure physical will follow
You'd have to find some first.
Paper does NOT cover rock, ROCK (gold) breaks EVERYTHING!
That was an analogous idea about 3-4 years and $10T ago.
I can't wait to see these margined on account, douche nozzles, that took their margined cash and re~levered it at 100-300:1 in the commodity and currency markets next week. Bitchez
Another round of QE.
Any resulting round of QE will probably include some sort of hair cut or dollar devaluation. The easy money days are coming to an end and now they need to take steps to protect the currency versus handing out free money.