The Death of Money 2.0

We've often heard the quote attributed to Mark Twain, "History doesn't repeat itself, but it rhymes."  It applies to financial markets.

"Dying of Money: Lessons of the Great German and American Inflations", by Jens O. Parsson, chronicles Germany's Weimar Republic hyperinflation during the early 1920's.  I'm always looking at different angles, and one interesting tidbit is the timing of the original publishing in 1974.

During gold's historic run from $35/oz. in 1971 to its peak of $850/oz. in 1980, gold had a major correction from $200/oz. in--you guessed it--1974, down to $100 oz. in 1976.  After this painful correction, gold resumed its bull market run until 1980, culminating in its secular blow off top.

Flash forward to today, and superimposing gold's epic bull market from its lows (in 2001 or 2008, take your pick), we can see that gold had a major peak of $1923/oz. in 2011.  Another bottom appears in December, 2015.  A few precious metals pundits have noted the parallel cycles of the 1970's and today's millennial run.

One of these authors is James Rickards, who has written several best-sellers on financial markets, including and specifically about gold.  His first bestseller, "Currency Wars", was published in 2011, coinciding with gold's peak. Another book title is "The Death of Money", published in 2014.  Makes you want to go "hmmmm...."

Did gold start another massive run up in late 2015?  So far, it sure looks like it.

The coincident timelines are certainly intriguing, but digging deeper, are they merely coincidental, or conspiratorial?  Are the financial elites signalling a pending, if not imminent financial crises on the horizon?  Is Jim Rickards, a former insider at the Fed and US Treasury, a true champion of the people, advocating gold as a protector of purchasing power?  Or is he just a useful tool of the elite, espousing truth, but sucking in early adopters in 2011, so the weak hands could be wiped out before gold resumes its next historic bull run?

Was gold's peak in 2011 analogous to its peak in 1974?  Likewise, was gold's bottom in 1976 a similar precursor to gold's bottom in 2015?  More importantly, what happens next?  If history does rhyme, we can expect another epic run up in gold (and silver).

An astute, contrarian student of history can deduce outcomes, but timing it exactly is next to impossible.

My long-term outlook for gold remains $6300/oz. or higher, as long as fiscal conditions continue to deteriorate and monetary policies remain accommodative.