In search of intrinsic value

Guido Romero Rank: 161 Followers: 1 Votes: 0 Years Member: 6 Last Update: 18 April 2014, 23:50 Categories: Relative Performance Charts
Gold / Gold Stocks
Currencies

Regardless of any recommendations you may receive from anyone, at this particular financial/economic/social juncture, gold bullion stored within your reach is the safest thing - coins are a fine store of value. I don't particularly recommend GLD as a long term investment but only as a medium term holding and/or trading vehicle. For long term holding I prefer CEF or any of the Sprott funds.

January 6/14 - I am reasonably optimistic monetary metals may begin to outperform. In the end of course, monetary metals will outperform any fiat currency. The trajectory however is not devoid of bumps and ravines and the timeline is uncertain. Purchasing power is being eroded at the fastest clip of the past 100 years. Deliberate and aggressive monetary and debt inflation is skewing the advantage towards those entities that are closest to the central bank hence the reason luxury items are flying off the shelves whereas the economy of the masses is stalling if not declining. Relative charts on page 7 are interesting and indicate the past 30 months were likely a dead cat bounce....

Dec 2/13 - The S&P is way over any level achieved in the past 13 years. If you agree with the Fed and Western main stream politicians as well as economists, this is the most desirable result brought about by their unprecedented political machinations and monetary policies. If on the other hand, you take time to look at the use of food stamps or the Labor Participation Rate in the US or, indeed, unemployment in general but youth unemployment in particular along with industrial production in the EU, then you know things are not as portrayed. The variety and range of recent Western monetary policy is not only unprecedented but is wholly aberrant if not untested and, by a significant number of metrics, is coiling the springs of potential disasters that will inevitably batter our lives through diminished purchasing power and loss of those social safety nets that were (expediently) promised.

Sept 17/13 - The price action in oil is remarkably

Less

100 - $SPX since 1980

The S&P is the benchmark I use to illustrate and buttress my argument.

101 - US$ purchasing power versus CPI

105 - 30years US Treasury Bond since 1980

110 - $SPX, the 30yr US TBond and the US Dollar since 1980

120 - $SPX and gold since 1980

125 - Gold since 1980

126 - Gold bullion inflated by the purchasing power of the US$

130 - $SPX valued in terms of gold bullion

135 - The 30yr US Treasury Bond valued in terms of gold bullion

140 - $SPX valued in terms of $XAU the gold mining company share index

Oct 7/13 - This is the power of the Fed. By simultaneously giving trillions to the banks and keeping interest rates artificially low, it can induce corporate re-financing thus boosting the nominal value of the stock market. The direct ramification of this policy is the devastation of purchasing power thus abetting inequality.

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