LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page >> News >> Story  Disclaimer 
Latest Headlines to Launch New Website

Is Gold Price Action Warning Of Imminent Monetary Collapse Part 2?
By: Hubert Moolman

Gold and Silver Are Just Getting Started
By: Frank Holmes, US Funds

Silver Makes High Wave Candle at Target – Here’s What to Expect…
By: Clive Maund

Gold Blows Through Upside Resistance - The Chase Is On
By: Avi Gilburt

U.S. Mint To Reduce Gold & Silver Eagle Production Over The Next 12-18 Months
By: Steve St. Angelo, SRSrocco Report

Gold's sharp rise throws Financial Times into an erroneous sulk
By: Chris Powell, GATA

Precious Metals Update Video: Gold's unusual strength
By: Ira Epstein

Asian Metals Market Update: July-29-2020
By: Chintan Karnani, Insignia Consultants

Gold's rise is a 'mystery' because journalism always fails to pursue it
By: Chris Powell, GATA


GoldSeek Web

Hurricanes are Coming!

 -- Published: Wednesday, 25 September 2019 | Print  | Disqus 

 - Gary Christenson

Hurricane Dorian pounded the Bahamas and hit the United States. The destruction was impressive.

Hurricane Federal Reserve has devalued the dollar for over a century. The destruction has been large. A few benefited, many lost wealth, purchasing power, pensions, jobs, and homes.

Hurricane National Debt has reached Cat 5 status, over $22 trillion in unpayable debt that weakens the U.S. economy, strains the government budget with half a trillion in annual interest payments, and sucks capital away from more beneficial uses. This debt hurricane should reach Cat 6 soon.

Hurricane Pension Default sits at only Cat 1 status today, but it will strengthen during the next recession. Low and negative interest rates will make it worse.

Hurricane Crazy Politics is building into a major force, expected to reach Cat 5 in October 2020.


  • We can’t stop winter from coming. Tornados and wildfires occur every year, and hurricanes form every summer. Plan around what you can’t control.
  • Hurricane Federal Reserve is politically powerful. Many people, governments, and businesses benefit from this “gravy train.” Work around it!
  • Hurricane National Debt is too large and growing. Debt will expand until it resets.
  • Hurricane Pension Default will grow and become a political nightmare. The mathematics make it inevitable.
  • Hurricane Crazy Politics: Enjoy the show. It happens every four years.


First: What do we know for certain?

  1. Debt will increase until it can’t. Every system has limits.
  2. When debt increases, the quantity of currency units (dollars, euros etc.) in circulation expands. The currency units devalue, and everyone pays higher prices. We have suffered dollar devaluation for over a century.
  3. Productive debt can be beneficial. Borrowing $10 million to earn $50 million makes sense.
  4. Unproductive debt used for consumption is destructive. The capital is gone, but the debt remains, and we must pay the interest. Borrowing to pay for bombs, personal and corporate welfare, interest on debt, and hundreds of other unproductive uses… leads to a dark place.

Second: Make Wise Choices.

  1. If a hurricane is coming, prepare or leave.
  2. Spend less, save more. Avoid debt and interest.
  3. If the Fed and government are devaluing currency units, invest in something that retains value as currency units buy less. Think gold, silver, real estate, stocks, whatever.
  4. You can time long-term market decisions. Stocks are not always a good choice. Buy and hold no longer makes sense. Gold was a poor choice between 1980 and 2000. Real estate prices move in cycles.

Third: How do I learn about Good Choices?

  1. Usually by making bad decisions and learning from them.
  2. Did you buy Internet stocks on margin in late 1999 or early 2000?
  3. Did you buy homes with no down payment in 2007?
  4. Did you buy stocks on margin in 2007?
  5. Did you buy silver in January 1980 because it “was going to the moon?”
  6. Or did you buy silver bullion at less than $5 earlier in this century?

Fourth: What Can I do?

  1. Question the narrative. Would you buy a used car from our national politicians? Do you believe the Fed cares about “Main Street USA” or unemployment? Why does Asia buy hundreds of tons of gold annually? Is gold useless and unimportant as the media proclaim? Is Wall Street helping anyone but Wall Street?
  2. Examine long-term trends.
  3. Compare ratios between markets to determine what is over-valued and under-valued.


Debt increases more rapidly than the population. Examine this (scary) log scale chart of official national debt divided by US population.

A close up of a map

Description automatically generated

Debt increases exponentially. There is no sign (as of 2019) that debt creation will decrease. As debt increases, dollars buy less. Plan on price inflation. Don’t expect this insane debt increase to end well.

Gold prices (and stock indices) increase as the dollar devalues. The price of gold may spike higher or fall too low for several years, but it will rise as dollars are devalued. In many currencies, gold sells at all-time highs. Gold prices will exceed the dollar high of $1923, perhaps in 2020.

A close up of a map

Description automatically generated

The correlation between annual gold prices and population adjusted national debt since 1971 exceeds 90%. More national debt means higher gold prices. Plan on it.

The gold to S&P 500 Index ratio (65 week moving average) shows when gold is overpriced or underpriced compared to the S&P. During the past 50 years the ratio has been relatively constant, except during the metals blow-off in January 1980.

A close up of a map

Description automatically generated

This graph shows a ten-year trend (1970—1980) of increasing gold to S&P ratios, a 20-year decline until about 9-11, a ten-year increase to 2011, and an 8-year fall until late 2018.

Conclusion: Gold is underpriced relative to the S&P. Silver (not shown) is also underpriced. Buy gold and silver knowing that our financial and political system will increase debt, devalue the dollar, and boost gold and silver prices much higher. The S&P is over-valued.


  1. Buy gold when the moving average of the ratio is rising.
  2. Sell gold and buy the S&P when the ratio is falling.
  3. Confirm timing with the 65-week moving average of gold prices.

A close up of a map

Description automatically generated


Buy gold in 1971—1972. Sell gold and buy the S&P in 1980. Buy gold in 2001, sell gold in 2011, and buy gold in late 2018 and early 2019


Of course not. We don’t know where the next hurricane will make landfall or how much flooding it will cause. We don’t know what disasters our politicians and central bankers will create during the next recession. And, despite decades of history, politicians might reduce spending, balance the budget, audit Fort Knox, lower taxes, abolish the Fed and push gold prices lower. Doubtful but possible.

Harry Dent tells everyone that gold prices will drop to $700 or lower. I think that is nonsense, but…

The Elliott Wave (subscription service) people are highly intelligent. They stated:

“We are confident that gold is at or near the end of a bear market rally…” [They expect further downside…]

Intelligent people can be wrong about the long-term direction of the gold market. We’ll see.

Debt will rise, politicians will spend, bankers will devalue, gold prices will rise. In the short term, gold and silver have had a nice run and should correct. Sentiment was excessively positive (dangerous) at the end of August 2019.

Expect a huge rally into next decade following a correction.

From Adam Taggart: “How to Ride the Gold (& Silver) Bull.”

The prospects for further gold and silver price appreciation have rarely looked this strong.”

From Alasdair Macleod: “Negative Interest Rates and Gold”

“For some time now, I have maintained the wheels are likely to fall off the global economic wagon by the year-end.”

“Assuming economic prospects darken because of the coincidence of American tariffs and the emerging crisis stage of the credit cycle, it will be check-mate for central banks.”

“Instead of central banks stabilizing the system by monetary easing, the easing itself will guarantee the crisis… we can be reasonably certain that we are seeing the start of the dismantling of the dollar-based monetary system, and that gold has much further to go.”

From Bill Holter: “Infinity is Here!”

“QE to infinity is no joke. It is very real and it is already here and just getting started.”

“…all monetary roads lead to gold. It looks like “liability capital” will all now merge into a superhighway leading directly to gold and silver …where no liability exists!”

From Gary Christenson: “The Big Cons Will Boost Metals Prices.”

Miles Franklin will transfer fiat currency into real money—gold and silver. This year—2019—looks like an ideal time to shift into metals and out of paper assets. The metals bull run could last 5—10 years.

Gary Christenson

The Deviant Investor

| Digg This Article
 -- Published: Wednesday, 25 September 2019 | E-Mail  | Print  | Source:

comments powered by Disqus


Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to >> Story

E-mail Page  | Print  | Disclaimer 

© 1995 - 2019 Supports

©, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


The views contained here may not represent the views of, Gold Seek LLC, its affiliates or advertisers., Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of, Gold Seek LLC, is strictly prohibited. In no event shall, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.