Double

Bottom?

DYI:  I find this chart fascinating as it truly spells out when average John and Jane Doe were actually getting ahead financially on a macro basis.  From 1970 to 1982 the U.S. economy went through an inflationary bust devastating basic savers with CD’s at the bank or those purchasing long dated bonds.  The stock market was no savior either from 1966 to 1981 had a cumulative return of negative -10%.  Only those savvy enough who knew the relationship of the Dow/Gold Ratio sold their stocks or stock funds and purchase precious metal mining companies side stepping the secular melt down and continued to enjoy great gains through the 1970’s.

This was to be repeated from the year 2000 to 2012 with deflation as precious metals performed due to their zero counter party risk of default continuing the gains for those who sold off their stocks and stock funds purchasing precious metals mining companies or physical gold/silver.  From 2012 on these companies along with physical gold/silver went into a steep and brutal bear market only this past year has metal/miners fortunes have brightened.

Which way are basic stocks or gold/silver precious metals mining companies going?  My take is for a double bottom [see first chart above] just as happened in the 1970’s with a bounce off the bottom and then dropping its final leg down for a double bottom.  

In other words gold/silver and precious metals will continue to once again have high performance!  

That’s my take.  Always remember what the late Harry Browne author and inventor of the Permanent Portfolio said about fortune tellers - always beware.  The bottom line is all we know is that gold – depending on your measurement – is around fair or average value or slightly below.  Which way will things go from here?  Who knows?  I have my thoughts and other have theirs and they most likely will not be the same.

DYI