WHEN THIS MASSIVE BUBBLE POPS… What Will Happen To The Precious Metals?
By Steve St. Angelo, SRSrocco Report
GoldSeek.com
Tuesday, 27 June 2017
As the Mainstream financial media continues to promote the biggest market bubble in history, only a small fraction of investors are prepared for the disaster when it finally POPS. The markets are so insane today, it seems as if fundamentals don’t matter any more. However, they actually do if we look at the numbers closely.
In order to invest in the correct assets going forward, one must choose between those with a low RISK and high REWARD versus assets with a high RISK and low REWARD. While this may seem like common sense, I can assure you, the market makes no sense whatsoever today. And most investors are doing quite the opposite. Go figure.
If we look at the following charts in this article, we can clearly see which of the following assets, the DOW JONES, GOLD or SILVER, enjoy the lowest risk and highest reward.
This chart shows the price action of the Dow Jones Index, gold and silver. Since its low in 2009, the Dow Jones Index is up 229%, from 6,500 to 21,400 currently. Even though the Dow Jones Index experienced a brief 17% correction in 2011, it hasn’t endured a healthy 30-50% market correction in over eight years. It is most certainly overdue.
However, after the precious metals prices peaked in 2011 and then declined, silver is only up 22% from its low in 2015 and gold is up 20%. Thus, the Dow Jones Index has surged higher for eight straight years, while gold and silver are still down considerably from their peak prices in 2011.
If we look at each asset class separately, we can see how over-valued the Dow Jones Index is compared to gold and silver. The next chart shows that the gold price fell 46% from its peak in 2011 to its low in 2015. Now, even considering the 20% current rise in the gold price from its low in 2015, it is still 35% below its 2011 peak:
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