Loading ...The Scariest Chart on the Planet
2020 could be seen in Hindsight as the year we all went back to the Future
Every time I show this chart …it’s the same reaction from the myriad of Commodity bulls on the Twitershpere
“NO WAY …CAN’T HAPPEN…THAT’S RIDICULOUS … FULLY’S AN IDIOT ” and my favorite “It’s an FBO”
Meanwhile it’s getting Ripe
Rambus’ favorite ( most predictable) pattern ..A breakout of a well developed flag followed by a smaller pattern just below the breakout. Very bearish !
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http://www.classic70s.com/1970s-prices.html
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Update March 9 2020
When this was originally posted in November 2019 no one had a CLUE what could possibly drive commodity prices back to 1970 values …It seemed ridiculous..even to me….but the chart was unambiguous…and needed respect…the Impossible is happening…Hyper Deflation
It’s funny because plunger was stating the reciprocal of your thesis
He’s a lot smarter than me 🙂
But I think his thesis is Post Bubble Contraction which should align with a commodity massacre
Bob Hoye: one of the feature of PBC is that gold to commodity ratio goes higher.
Seems it is on track since 2007.
If the underlying instrument to showcase “commodities” is the Reuters CRB.. then you are very close to the gold to crude oil ratio… since CRB 39% energy. GC/CL has a strong correlation to GC/CRB
Conceivably some commodities might move one way and others another while yet others perhaps not very much at all.
Yes. Hard to put all commodities in the same performance basket… I’ll have to start comparing each other between themselves and see how to correlate. Using the CRB to represent “commodities” as a whole could be doing a disservice to some non-correlated items in that basket.
Just today or yesterday I was noting that nickel, which fairly recently I was citing as a metal whose price was doing well, has gone down badly in price, and that if copper were to go much below 2.50 a 5 year chart makes it look as if it could rapidly go down to 2.25.
Nevertheless just because something could happen doesn’t mean it will. The effects of nuclear war would be dreadful, but just because they would be dreadful doesn’t mean that war is certain. The war needs to start first. The spread of something that the world’s health systems are unprepared for — some Ebola virus or worse — is a real and horrible concern, and not something I at least can rule out. But that the potential may be there does not mean that it will occur or even that if it starts to occur that the process is absolutely irreversible once it starts.
You looked into it Fully good on you.
Nobody likes bad NEWS but burying ones head in the sand is not productive either…….
173 appears to be close to the magic number imo, they let gold run to buoy the CRB is the way I see it.
3 prong effect dampens the $US, supports the CRB and keeps the EURO from collapsing.
Compare this chart with the EURUSD gents.
I dare the knights of the tent to take a good hard look at the EURUSD (EURO/DM) (ICE) chart from 72 onward. Compare the EURUSD with the CRB and Silver Copper charts etc…..No predictions for the future but these charts should not be ignored…….
GLTA
This means Gold to crb chart looks good. The ratio will continue to go up which is good for the PM miners. Margin for miners will improve much higher than current level.
Thinking Outside the box…something I can think of to cause this……Some viable Free Energy Source is discovered.
That would be Good Deflation
🙂
Deflation is good for most of us.* Just not for the bankers, as it undermines what they can get for the collateral they hold against loans they made to us. Deflation is not to be confused with economic contraction, which isn’t so hot. In deflation a fixed amount of nominal savings buys you more (not less) each year, as you’d expect in a world with a steady pace of technological advances. If you do the math, the world over the last three decades has very likely seen NEGATIVE per capita income growth, if you exclude the demand created by net lending (incremental debt) — and by population growth if using aggregates. Ie, our standard of living has risen only via kicking the can to the next generation, who will pay for it. Inflation is the means the bankers have used (and sovereigns) to skim off more than their share of productive wealth.
Chart documenting point made above
https://www.barnhardt.biz/wp-content/uploads/2014/05/DebtGDPchange.png