Gold Price vs rising Debt to GDP ratio
Patrick: You are in luck. All of the stars mentioned in last para have lined up now. He mentions “and/or” but now all are happening.
Thats why watching indicators like:
Credit Spread
plus Steepening Yield curve
plus Real interest rate
plus USD
Plus GSR
are important going forward.
September 29, 2014 :
Does the debt/GDP ratio drive the gold price?
The correct answer is no.
“The reality is that a rising US debt/GDP ratio can be a valid part of a bullish gold story, but only to the extent that it helps to bring about lower real interest rates and/or a steeper yield curve and/or a weaker US dollar and/or rising credit spreads. It isn’t directly bullish for gold, which is why a long-term comparison of the US$ gold price and the US debt/GDP ratio shows no consistent relationship. The same can be said about a rising US monetary base.”
https://tsi-blog.com/2014/09/does-the-debtgdp-ratio-drive-the-gold-price/
Thanks Bikoo! Totally makes sense… as all are related.. but don’t have 100% correlation with gold price… give more of a feel if macro’s are supporting a bull market.. Gonna read that a few times to make sure I understand.
These indicators except GSR do not have 100% relation. these time lagged but overall they are related.
Rate of change of debt/gdp to gold is also telling.. (not covered by his article)… all bullish. soo interesting!
Currently yes. because all the stars (indicators) are as Steve mentioned in conclusion (to the extend and/or). SO COR should reflect +ve relationship now which it is as you have timely caught that.
Deflationary UNTIL the bottom is found…
IMHO China YINN and the financials FAS will lead…GL
Hey Atomic… those charts kinda look like RINF (expected inflation) which I’m currently tracking to support a turnaround. Sweet!
Eventually…
on a good note.. vix is getting crushed today… so bottom for gold could be in… 1450$. we might dip.. but I don’t think we will see that again in the short term. (unless another meltdown sometime in the future)