New Gold Silver Ratio Chart from 1862-2020 Just Released

https://sdbullion.com/blog/just-released-gold-silver-chart-1862-2020

200 Years Of The Dow/Gold Ratio Suggest Staggering Moves Dead Ahead

http://bullmarketthinking.com/200-years-of-the-dowgold-ratio-suggest-staggering-moves-dead-ahead/

US Debt - Gold Reserves Ratio

Gold reserves are historically cheap relative to US (official) debt levels.  Gold is even cheaper when accounting for astronomical unofficial debt obligations, including entitlements like social security, Medicaid, Medicare, and all the financial bailouts.  But even using manufactured cash accounting (vs. GAAP accrual accounting), US debt levels are humongous.

Click on Image to Enlarge

Greyerz - Market Chaos & Incredibly Important 200 Year Chart

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/5/31_Greyerz_-_Market_Chaos_%26_Incredibly_Important_200_Year_Chart.html

Silver, gold ratio

Gold is starting to gain traction in mainstream airwaves, but silver is the forgotten stepchild. If gold prices soar in the coming years, silver will go parabolic.

http://www.kitco.com/ind/Wilson/july062010.html

See disclaimers in the side bar.

Disclosure: long gold and silver.

A Tale of Two Cities (part 2)

Here's the bad news for equities. This graph (click to enlarge) charts the DJIA relative to the price of 1 ounce of gold. At the height of the internet bubble, the DJIA/gold ratio was 44--and clearly unsustainable. At the depths of previous bear markets, the ratio was unity (1:1).

Currently, the ratio is around 10:1, and trending downward in the short- and mid-term. In order for the ratio to reach unity, the Dow Jones index has to either decline by a significant amount, or the price of gold per ounce has to increase by a significant amount--or both have to occur simultaneously. Simply put, the numerator (DJIA) has to match the denominator (gold price per ounce).

The take away message from the disaggregation of both charts is that while financial asset values may increase appreciably in nominal terms, in real terms (i.e. inflation-adjusted or indexed against gold), the returns for equities do not appreciate nearly as much when measured over a long period of time. In other words, the rate of return for equities is impaired due to the devaluation of the USDollar.

No one has a crystal ball, but the short US equities / long gold trade seems like the logical play going forward. Of course, with governments and central bankers wreaking havoc by manipulating markets worldwide, logic doesn't always win out initially. Fundamentals become distorted beyond recognition as bubbles are created and burst, causing investors to lose money, despite making correct market calls. Timing becomes the enemy, not the ally. So tread carefully. Read the disclaimers in the sidebar. Perform your own due diligence.

Disclosure: long biotech and energy sector equities, long gold and silver mining shares.

This chart says it all...

This chart by Chris Martenson compares total debt (or “credit”) in the U.S. to GDP (or Gross Domestic Product) on a percentage basis. Current total credit-market debt stands at more than 340 percent of total GDP.

As we can see on this chart, the last time debts got even remotely close to current levels was back in the early 1930s, and that bears a bit of explanation. The debt-to-GDP ratio back then didn’t start to climb until after 1929 (blue arrow), because debts remained relatively fixed in size, while it was the GDP that fell away from under the debts. With the exception of the Great Depression anomaly, our country always held less than 200 percent of our GDP in debt (green circle). In 1985 we violated that barrier and have never looked back.