Message in a bottle to Auntie Janet--the markets don't threaten the economy--you do!!
Crash helmets strapped on? We got the ratio dive. In other news, the members of the PPT tribe are springing into action--liberty and justice for all!! They will induce some "fluctuations"--but I think we are still headed to 132 on the gold:bgeix ratio. That level last seen in Fall 2014.
"As I’ve said before: gold and silver never benefit from monetary inflation flowing from the Federal Reserve. All those market groups above now in negative territory do, or rather did. Gold, silver and obviously the precious metal miners benefit from wealth fleeing deflating financial assets such as stocks and bonds, and that’s exactly what we are seeing now."
Mark J. Lundeen
In the same article posted on the gold-eagle site (Feb 7, 2016) , there is a chart that shows the Barrons Gold Miners/Ounce of Gold Price. Gold Miners are valued at the same value vs. gold as in the 1920s. Very little downside risk here. Huge risk in the US dollar, trashuries and all other financial assets.
Negative rates--the ploy to force bankstas and investors into longer term trashuries (er US Treasuries) When that all blows up, it should be fun again here on the yellow brick road.
Paul Moritz Warburg, a German-Jewish immigrant who was one of the founding fathers of the U.S. Federal Reserve, had a fervent wish that his creation would be seen as one of America’s great monuments — “like the old cathedrals of Europe.”
Warburg’s dream that “the Fed” would become a cherished American institution has never looked more in doubt. The Federal Reserve, which was enacted by Congress in 1913 and set up shop the following year, is today an institution under siege. More surprising perhaps is that the Fed is refighting partisan and ideological battles that Warburg and the other founders thought they had settled a century ago.
Congress today is rife with bills to restrict the Fed’s independence or subject its decisions on monetary policy to real-time Congressional review. (This would require Janet Yellen and the other Federal Open Market Committee members to conduct deliberations on interest rates in open political theater.) Another bill, by Congressman Kevin Brady (R-Texas), would charter a commission to study the Fed and recommend an overhaul.
Most all have bought into the full faith and credit mantra--at least there are great bargains in real money these days--bug49er! Have a good one!
Next stop for gold:bgeix ratio is 132--currently at 184, down from 205 high. RSI (14) has not been below 30 since 2003, on this ratio--a loooong time! I expect it to get below 30--it is now at 52.37--this is all based on the weekly gold:bgeix on the sharp charts site.
These artificially low prices of late will not stand. The Gold Cartel is going to hit a tipping point some time when they will be unable to carry on.
There is a strong possibility that this tipping point is near and they know it, which is why their day-to-day selling has gone into overdrive. Perhaps recognizing that their day of reckoning is not far off, the Gold Cartel could be concluding their four-year-plus orchestrated takedown. If that is so, the best way to accomplish their goal would be to make the short side trade so obvious, so easy to make money on, that it would turn the specs very short, maybe the most in history, while cartel covers more of its own short positions.
Some in our camp have been calling for the end game to happen with a reset in the West in which the prices of gold and silver go sharply higher overnight. That sort of reset would cause catastrophic losses for many shorts and put the Comex in jeopardy, which would have repercussions for other financial markets dealing in futures.--GATA
For about three years the Gold:BGEIX ratio has gone from about 90 to 210. In the 1927-29 period the Dow industrial climbed from 160 to 380.
210 BGEIX top 2015 380 industrial top 1929
90 BGEIX in 2013 160 industrials1927
2.333333333 Hello Ratios 2.375
Get your crash helmet ready--no need for a tinfoil hat no mo' :).
_And don’t worry about gold in Fed-rate-hike cycles. There have been 11 since 1971, and in the 6 that started with gold near major lows this metal enjoyed stellar average gains of +61.0% over those exact Fed-rate-hike cycle spans! During the last one between June 2004 and June 2006, the Fed hiked no fewer than 17 times to blast its federal-funds rate 425 basis points higher. Gold surged up 49.6% during that!
While gold lost ground in the other 5 Fed-rate-hike cycles since 1971 as futures speculators universally believe will happen today, its average loss was just 13.9%. Even more interesting though, all of these Fed-rate-hike cycles began with gold near major secular highs. That certainly isn’t the case now. Fed rate hikes are very damaging to lofty stocks and bonds, rekindling gold investment demand for portfolio diversification._