{"id":461208,"date":"2020-03-29T07:45:46","date_gmt":"2020-03-29T11:45:46","guid":{"rendered":"https:\/\/goldtadise.com\/?p=461208"},"modified":"2020-03-29T12:09:15","modified_gmt":"2020-03-29T16:09:15","slug":"gold-owners-are-the-barometers","status":"publish","type":"post","link":"https:\/\/goldtadise.com\/?p=461208","title":{"rendered":"Gold Owners are the Barometers (added Japan)"},"content":{"rendered":"

Why was there no gold backwardation in the 80’s?<\/p>\n

Why was Volcker able to get 18% rates out there to keep inflation in check? According to Volcker, debt to gdp was very manageable back then (~30%), which permitted him to (he mentioned it would be impossible to do so now).<\/p>\n

Gold owners accepted that, and it built trust in fiat currency. They did NOT remove their bid’s for paper fiat, hence no backwardation.<\/p>\n

Now forward to 2009.. more debt.. less gdp.. ratio exploding above 60%. Trust diminishing… hence more events of backwardation.<\/p>\n

Lack of trust peaked in 2011… as debt to gdp started to stabilize. With 2015 was the lowest it went, then rocketed a few points higher… which also signaled the low for gold.<\/p>\n

Now, where do you think we are heading? We are at 106%!!!<\/p>\n

THIS IS GONNA GO BALLISTIC!!!! The gold barometer might just explode.<\/p>\n

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Note: debt to gdp data ends 2019-10-01, quarterly updated. Next 2 updates gonna be nasty.<\/p>\n

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Edit: This podcast woke me up on this idea of debt to gdp…<\/p>\n