Consequences, Crashes And Coronavirus

Gold to Silver Ratio:

We could expect gold to fall less than silver, but whoa… look at this graph of the weekly COMEX gold to silver ratio. The ratio exceeded 120, an all-time historical high.

The ratio shows panic, huge sales of silver contracts on the COMEX, and desire for gold, the currency of last resort. Central banks have bought gold for over a decade. Russia and China sold dollars and T-bonds and bought thousands of tons of gold. In contrast, Western governments increased debt, pushed interest rates to near zero, and levitated stock markets while shipping gold to Asia.

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The DOW to gold ratio shows the preference for paper and stock investments versus hard assets—real money. The ratio peaked in 2000 before the stock market crashed, fell into 2011 (gold market peaked), rose into 2018, and fell since then.

The ratio trends for many years. It peaks and breaks a trend line, falls and breaks a trend line, and repeats. Expect the ratio to fall for several years as the DOW declines or makes little progress and gold rockets higher.

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Crude Oil:

Crude oil crashed below zero on April 20, 2020. This hurts American shale oil companies, traditional oil companies, and the banks that loaned them $billions.

Silver to S&P ratio

Silver prices are too low, and the S&P is high. Expect silver prices to rise substantially.

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CONCLUSIONS:

  • Markets are volatile and crazy. The consequences of fake money and bad policies crash markets and economies.
  • Inflate or DIE!
  • You can ignore fake money, but you can’t ignore the consequences of fake money. Year 2020 is the year we experience the nasty consequences of excessive debt.
  • Government and Federal Reserve responses show panic. The “printing” has begun.
  • Unemployment is spiking higher.
  • COVID-19 will be blamed for the economic reset.
  • Revenues will fall, expenses, and debt will rise. Since corporations and individuals can’t counterfeit dollars (as the banking cartel does), expect bankruptcies to soar.
  • Enormous forces are pushing stock markets, crude oil, gold, and silver markets lower. Someday stock markets will bounce higher and fall further. Gold and silver prices on the COMEX will soar to new highs.
  • Premiums on gold and silver bullion and coins are large. The U.S. Mint is out of silver eagles.
  • The DOW to gold ratio is falling, has broken trend line support, and will fall further this decade. Expect the ratio to fall from 22 (in 2018) to 5 or below. A DOW of 20,000 and gold at $10,000 are possible in several years.
  • $ trillions of fake money have evaporated and gone to money heaven. The carnage is not finished.
  • Our economic crisis reminds me of a professional golfer playing the back nine on Sunday afternoon. A bad bounce knocked his drive out of bounds and forced a double bogey. He followed with back to back triple bogies. Game over.
  • Ratios show that silver is underpriced compared to gold and stock Indexes.
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Disclosure: None. 

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