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Charts Indicate a Major Deflationary Event is in Progress
“I don’t believe it is a question of whether we are going to experience some kind of deflationary event as I believe we are already in one. The size of some of those H&S tops leads me to believe it will last longer than most think. The really big question that I don’t have an answer for just yet is how will it affect the PM complex? So far they have been holding up pretty good, but we’ll need to see if they can keep outpacing everything else.”
All the best…Rambus
Rambus Wednesday Report
>>>The really big question that I don’t have an answer for just yet is how will it affect the PM complex?<<<
You mean when will the whole world mess including the stock market quit dragging everything including the PM down with it?
What is meant by deflation? Talking about inflation rate plummeting? I.E. cpi or cost of living?
In the short term 1-3 years Rambus could be right, but in the long run there will be strong inflation due to money printing. Remember in 2000, cost to produce an ounce of gold was less than 300$, 10 years later 200% more at $800, this means 10%/year. Meanwhile 2 deflationary events happened, the 2001-2003 dot com crash and 2007-2008 housing crash. Maybe next crisis with China collapsing under its big debt load will be far bigger, but in the end (long term) money printing will win over deflation.
He is using the term as dropping commodity prices and dropping stock prices .
Dropping asset prices
Thanks Fully.
REAL economic growth…
Looking at Copper, it crashed into the 2001-2003 meltdown and found a bottom end of 2001. After that it went up like crazy due to China demand and commodity inflation. It crashed again big time in 2008, but recovered since. In a deflationary collapse you better not own commodities. Maybe that’s why silver is so weak?
Will Mr. Market support copper and silver prices, attempting to hide deflation?
Gold-To-Copper Price Ratio… possible double top at 650? Perhaps not. It could go back to 700. I don’t know.
http://schrts.co/RgBkywRM
Inflation and Deflation revolve around CREDIT … ONLY. Simple as, “More or less”?
Deflation is when Lenders stop supplying Credit, or only on tighter terms. (Because they no longer have confidence in repayment)
There is now every reason to expect bankers to have concerns about credit worthiness.
Re PMs, the tide will be turning over the next few months. DSLV/ZSL seem to be leading. Some question on those lingers. But I expect to taking pilot positions soon, as VLT holds.
Also have DUST and JDST setting up … by late spring. As VLT holds.
Believe what you want. I’m just following my system and my charts.