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In all reality, the beginning of another secular bull cycle in the stock market has just begun. I don't expect gold or silver to "recover" till well into the 2020s.
That said I think prices will bottom around 2015 or so, and then I would want to buy some. It will likely bounce around for a while until the cyclic market cycle ends in 2025 or so. So I would use inflation to my advantage and buy as much as I can in 2020 or so. But not until then. Too risky.
gold is nothing more than a commodity. Period. You can't eat it and can't use it as money anywhere that I'd want to spend money in.
In all reality, the beginning of another secular bull cycle in the stock market has just begun. I don't expect gold or silver to "recover" till well into the 2020s.
That said I think prices will bottom around 2015 or so, and then I would want to buy some. It will likely bounce around for a while until the cyclic market cycle ends in 2025 or so. So I would use inflation to my advantage and buy as much as I can in 2020 or so. But not until then. Too risky.
gold is nothing more than a commodity. Period. You can't eat it and can't use it as money anywhere that I'd want to spend money in.
I think this will happen.
"Or two, that the fiat capital era has produced ever increasing extreme swings, which suggests the ultimate low in the dow-gold ratio is still ahead and will be the lowest yet."
I found a great chart (that for the life of me I can't find) that American Funds made which said why in all eras there are risks, from the 1900s to the raging 20s to the booming 50s and 60s, stagflation 70s, Reagonomics 80s, information age 90s up to 00s dot-com bust and housing bust.
The fact of the matter is that yes, there WILL be wilder swings because the stock market operates on a S-ladder (as shown in your second chart) on a LOGARITHMIC scale. Ergo, the longer the market operates and increases, the wilder the swings because the scale of the economy is getting larger.
You will also note the time scale of the flat-linings. We're getting pretty darn close to the next break-out. Could happen tomorrow, could happen four years from now. That's probably the latest I would predict it happening.
Now is the market overpriced in the short term? Sure, perhaps. But long term, there's just too many innovative and exciting things going on to NOT be bullish. 3D printing everything from houses to organs to car and airplane parts, leading to a revival of America's industrial base. Quantum computing and DNA based computing. Transitioning from provider-centric to patient-centric models of medicine (23 and me was just the start ... they simply started too early IMHO). Cybernetic implants. Automated mining of asteroids and other planets. Green energy and advanced "old" energy.
I could go on but you get the point I hope. We are in an innovation cycle which is characterized by a flat-lining of the S&P500 scale on a logarithmic y-axis. The only sense to make now is buy the wide market because everything will boom. Individual stocks may come and go, even whole market sectors may boom or bust. But investing in the greater economy, now that makes a whole lotta sense.
Am I saying gold and silver have no place in a portfolio? Of course not. Only a fool would say that. All I'm saying is that now the appetite for risk and thus money is transitioning from bonds, the USD, and silver/gold (traditionally safe haven investments) to more traditionally risky assets, like stocks.
And what do you do when you see a downward trend? You buy of course! And then hold it for when it does eventually recover. I personally will buy more gold if it hits 900 / oz. If it flat-lines around 1100 / oz then I will consider it as a long term investment.
I am correct when I say it is not money, only a commodity. But one can use gold and to a lesser extent silver as a part of your portfolio quite nicely if done right.
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just look for my posts. I have been buying physical silver and FSAGX, EXK, SLW, AG.
