Historical Analogs
Everywhere you look, financial commentators and video content producers, display charts and tables for all kinds of financial, historic analogs. Many of them are useful, while some, depending on what is being compared, are quite valid. The topic of many, refer to precious metals, where it is important to differentiate why some things are valid comparisons, while others, are not. In the case of precious metals, especially Silver, BOTH are true. Let me explain. When you see all the analog charts and tables of how gold and silver performed in the past, they do provide perspective, however they are not directly comparable because many factors are different. The early PM runups were either back when gold was fixed at $35/oz and silver at $1.29 and it was illegal to own gold from 1933 until 1976. In the case of silver you could own it, but it was removed from coinage after 1964 and there was still a surplus of silver for decades after. Now, there is so much more industrial demand and usage and it has been in a deficit supply situation for six years. The other big reason things are different, is that while Gold was managed by the central banks for decades, rule changes and the decline of the dollar’s value, have had central banks and governments buying it hand over fist for ten years. Silver has gone from a 40+ year suppression scheme of massive paper shorts, to unwinding those naked shorts as a result of banks facing the economic reality they can no longer fight the tide of dwindling physical supply and likely government mandates to stop the naked short selling of paper contracts. Where does that leave us? With the ONE historical analog that is the most likely outcome. London based YouTube provider Mario Inneco has been studying PM’s since the early 2000’s and been comparing for years(with charts and tables) the historical analog of where gold stands, currently compared to the hyper inflation in Weimar Germany during the 1920’s. While there are always differences in historical analogs, I believe this is the best guide for what is likely coming in the months to come. One can make a case that given the level of debt, the fact that the US dollar is the global reserve currency, and that this is probably the only time in history that all countries are and have been using fiat, rather than sound, physical precious metals for over 50 years, the coming hyper inflation is going to make what happened in Weimar Germany, look like a mild version of what is about to occur. The one hope, and it is only hope, with no visible evidence, that the Trump administration has a plan that will avoid such a catastrophe. I doubt it. Better to hope for the best, but be prepared for the worst. It may not guarantee survival, but should greatly increase the odds of doing so.
Good Post thanks CM
Thanks. The gold chart you posted is looking more and more like the one Mario has shown a number of times of the German Mark between 1922-23.