Over the last 100 years, the major peaks and troughs of the silver/gold ratio have marked HISTORIC turnings in the markets.
As the ratio surges through 80 to 1, is the gold / silver ratio trying to send us a MAJOR WARNING?
Submitted by AGXIIK:
February 2016 is how 80 to 1 and rising steadily Is this an indicator of worsen times, more economic stress and banking problems. Correlation and causation are at work here.
I’ll leave readers to decide for themselves.
The peaks of this critical ratio are the peaks of economic stress.
Major GTSR Peaks and Troughs:
Sept 1931: 78 The Depression bites hard–gold is a monitor of fear
July 1940: 97 Winds of War are blowing hard
May 1968: 16 Lots of war(over there), DOW is high, inflation is low PMs are kicked to curb
April 1972: 31 Watergate, War is going badly, higher inflation and taxes, wage and price controls
June 1973: 45 Losing war, recession, DOW crash post gold standard, inflation and joblessness high
Jan 1975: 42 DOW at low, inflation and unemployment hit 10%
Jan 1976: 26 Pivotal presidential election year—hopes for revival are high.
Dec 1979: 14 The gold and silver rush in on, silver skyrockets in price Thank you Bunkie!
Mar 1980: 41 Gold and silver are near their peak in price
June 1983: 36 Interest and tax rates are down, economy starts to pick up.
Oct 1986: 76 Economic and banking headwinds, Russian and currency crises abound
Jan 1991: 100 Start of major banking crisis, housing crash, 1000 banks were closed
Sept 1991: 92 Continuation of bank and housing crash
June 2003: 79 Culmination of tech wreck
Nov 2006: 49 Low GTSR, a couple of months before the 2007-09 housing and market crash
Nov 2008: 81 One month after Lehman crash
April 2011: 32 Two months after the gold/silver price peak and price crash–an outlier event
Feb 2016: 80 Let the good times roll—NOT
Note that the swings have become more radical and violent in the last 40 years
The systemic stresses grow daily as the gold to silver ratio climbs.
The chances are much better that gold will go up significantly in price before silver. Silver is a lagging indicator.
I surmise gold goes up first because it is a metal that means something to the central banks, central governments and wealthy individuals.
Silver is poor man’s gold and when the vast majority of people realize they are behind the curve and must acquire precious metals, they go to silver.
While silver is more of a commodity metal at present prices, imagine its value when its price builds to the point at the GTSR is 20 to 1 and gold is $2,000.
This is food for thought. And food for those who see this ratio as an indicator of weakness in the overall markets.