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

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

GoldSeek.com to Launch New Website
By: GoldSeek.com

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

 
Search

GoldSeek Web

 
Is Gold Price Action Warning Of Imminent Monetary Collapse?


 -- Published: Wednesday, 22 April 2020 | Print  | Disqus 

By Hubert Moolman

 

22 April 2019

 

During the 2008 financial crisis the Fed significantly increased the US monetary base to keep the system from collapse. They are currently in a similar situation, and have done (is doing) the exact same thing.

 

Here is a chart of the US monetary base to illustrate the similarity:

 

 

With the 2008 actions they were able to avoid the collapse until now. Will the current actions yield the same results, or will we see a completely different outcome?

 

One thing to look at for this answer is Gold (probably one of the most important things).

 

So, when the Fed increased the monetary base of the US significantly in 2008, it took Gold prices quite a long time to show price increases to catch up with the monetary base. Then, the Fed doubled the monetary base in a period of about four months. However, from around the same time the Gold price took almost three years to double, thereby only catching up very late in the game.

 

Gold was not crying system collapse, and rightly so.

 

That shows that there was still a decent amount of faith and resource in the monetary system to be able to continue. Here is a chart that tracks the Gold price relative to the US monetary base (Gold price/US monetary base in millions):

 

 

Point 4 in 2008 is where the Fed increased the monetary base significantly. The massive decline to lower than point 1, shows that the Gold price did not keep up with the US monetary base.

 

So, although Gold was going up during that same period, it was not warning of system collapse. There were two other periods in history that similar situations occurred, but gold actually was warning of a system collapse (or system bank run, if you will)

 

Those times were in 1933 and 1971, and you can read more about those (and the above chart) here. Both of those occasions resulted in a system reset.

 

In the chart above, there are two patterns marked out (1 to 4). The current pattern appears to follow the earlier pattern. If the similarity continues, then there is a good chance that the outcome of the current crisis will be like the 2008 one.

 

If there happens to be divergence from the earlier pattern, and Gold outruns the monetary base increase (by the chart going higher than point 4 over the coming months), then we are likely to see a radically different  (and worse) outcome to the 2008 financial crisis.

 

For more on this and additional analysis, you are welcome to subscribe to my premium service. I have also recently completed a Silver Fractal Analysis Report as well as a Gold Fractal Analysis Report.

 

 


| Digg This Article
 -- Published: Wednesday, 22 April 2020 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2019



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com 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 GoldSeek.com. 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


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, 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 GoldSeek.com, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, 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.