Credit deflation and the reflation cycle to come (part 2)

[Loki]

@JMD look the science is settled and if you're not green you're unethical and don't deserve any money.

Pay your carbon taxes, bigot.

[Don Coglione]

2 hours ago, Sideysid said:

What’s the consensus on here for Rolls Royce. Obviously suffering a triple whammy now and in the near future with air travel, luxury cars and the auto market. (Which is why the current share price is appealing to me)

My thinking is military contracts and other transportation with government monopoly money may make it a buy at this price or am I missing something?

 

Rolls Royce Cars is owned by BMW.

[JMD]

31 minutes ago, Loki said:

@JMD look the science is settled and if you're not green you're unethical and don't deserve any money.

Pay your carbon taxes, bigot.

Yep - just like the wearing of 'face nappies' (not their technical name btw) was settled... until it wasn't.

Actually, I get it that science develops/changes, that's accepted. I just wish the catastrophising climate people had the same unbiased enlightened intellect to think in the same way. And that includes the 'old-biblical-sage-like' Attenborough, to the 'mad-middle-ages-child-savant/saint' wannabe Thunberg - showing us i think, that the same personality types crop-up time and again throughout history (interesting really, if the observation were not so tragic!). 

[Majorpain]

Really informative interview on the silver market, he lays out a lot of info i really didn't understand and whats recently changed.

In a nutshell, JP Morgan uses its 150m Oz stash as leverage to drive the Comex silver price up and down to make consistent profits each year.  Its a bank, near 100% guaranteed profit (Quarter on Quarter) is manna from heaven for a bank and the majority of people who haven't worked in one (myself included) would not understand that mindset.

The blowouts in the market earlier in the year forced the regulator to change the Comex from a futures market to actual delivery, everyone trying the short the market had to actually deliver the metal (JPM lost 29 million oz in just one period of their stash).

Is he going to be right?  We are not going to have to wait long to find out IMO.

[JMD]

Maybe 'bit' off-topic, but only slightly because there is so much comment in news lately and becoming bigger and bigger issue - and in my opinion these divisive (non?) questions are set to divide society further for many years to come - so would really appreciate comment from others with clear views about this. Of course i'm asking here in a purely economic context, not a  social-justice-warrior one!  

The question is: Did Britain grow rich off the back of its Empire?

For me, although i accept that for a relatively short 250 year period, foreign resources were taken/exploited from the British colonies, but i don't think that 'extraction' alone crippled those countries for ever. In fact the infrastructure, institutions, social peace that was created/bought to those same countries was of great lasting benefit. And if Britain is wealthy today because of its past exploitations, why is it that Germany for example - that didn't itself have an empire - is probably even more wealthy than Britain?  

(The moral issues over slavery, which most countries including African ones did, and India still does do, are very important, but do think are separate questions. And simplistic foreign policy, such as divide-and-rule practices, and carving up/dividing countries can of course be criticised - but again, i think these are separate topics... Anyway for what its worth, i think judging moral codes across different eras is pointless/destructive even. And for example, as a meat-eater, i fully expect future generations, who will be able to avail themselves of lab-grown meat, to think me morally inferior.)

[Hardhat]

16 minutes ago, JMD said:

Did Britain grow rich off the back of its Empire?

The short answer is yes.

“At its height, it was the largest empire in history and, for over a century, was the foremost global power. By 1922 the British Empire held sway over about 458 million people, one-fifth of the world's population at the time. The empire covered more  than 33,700,000 km2 (13,012,000 sq mi), almost a quarter of the Earth's total land area.”

{Ferguson 2004 p.15, Elkins 2005 p.5}

 

Also worth looking into the history of the East India Company, Royal Niger Company (now Unilever) and pretty much any other British / English on this list: https://en.wikipedia.org/wiki/Chartered_company

 

The Empire did deliver some benefits to the countries that were colonised, but it's hard to ignore the point that it was essentially extraction of resources by force and most of those chartered companies had private armies. Those resources were funnelled back to Britain and made Britain rich, especially textiles, spices, etc. You have to remember this was a world before widespread crude oil consumption, which was the major game changer for the balance of world power & wealth in the last century.

 

The long answer needs a separate thread...

[Harley]

1 hour ago, JMD said:

But those pension-grab 'consultations' have already started.

Excellent bit of intel ta.  Eco stuff is quite a smokescreen for all sorts of deviousness.  You can add consultations on restrictions on the 25% pension withdrawal to a growing list.  A trend.  Going to get worse.

[Ellandback]

2 hours ago, Majorpain said:

Really informative interview on the silver market, he lays out a lot of info i really didn't understand and whats recently changed.

In a nutshell, JP Morgan uses its 150m Oz stash as leverage to drive the Comex silver price up and down to make consistent profits each year.  Its a bank, near 100% guaranteed profit (Quarter on Quarter) is manna from heaven for a bank and the majority of people who haven't worked in one (myself included) would not understand that mindset.

The blowouts in the market earlier in the year forced the regulator to change the Comex from a futures market to actual delivery, everyone trying the short the market had to actually deliver the metal (JPM lost 29 million oz in just one period of their stash).

Is he going to be right?  We are not going to have to wait long to find out IMO.

If that amount of chicanery has been allowed thus far what stopping them from adding more, but as you say we'll soon find out. I listen to his TFMR daily podcast and find myself feeling sorry for him as he rants against the injustice after all these years. Reckon he's doing alright for himself though!

[sancho panza]

On 05/07/2020 at 00:34, Transistor Man said:

UK consortium acquisition of OneWeb

My thoughts:

1. Connected Autonomous Vehicles

See Project Darwin on the Harwell Science Campus, Oxfordshire, a collaboration between Telefonica/ O2, European Space Agency, and UK Space Agency, Oxford + Glasgow universities.

CAVs will require highly-reliable (diverse) networks, enabling massive real-time data transfer rates and volumes. UK sees a solution based on a complimentary combination of terrestrial 5G and satellite links.

2. A platform for UK Space start-ups

The UK has already gone Space investment crazy over the past few years. There are now 1000 people working in the space cluster on the Harwell Campus, many at startups associated with the Satellite Applications Catapult centre.

OneWeb will act as a technology platform, enabling many of these R&D/ startup activities.

3. OneWeb will enable a UK Sovereign Global Navigation System, in the face of the Galileo-lockout 

After the Leave result, the UK was strongly locked out of the EU’s Galileo project to build a European rival to GPS. 

Treason May’s surrender deal would not have got us back in!

Back in 2018, the then-PM committed the UK to build its own global navigation system, at a cost of 3 billion +.

“I cannot let our armed services depend on a system we cannot be sure of. That would not be in our national interest. And as a global player with world-class engineers and steadfast allies around the world, we are not short of options.” 

And OneWeb is how we are going to do it.

Galileo follows the atomic-clocks, and precise-orbits, approach of GPS, and is expensive at 10 billion $\€.

However, there are proposals to use mass produced LEO satellite constellations (like OneWeb) to offer global navigation system at far lower cost.

It could even be better than Galileo.  

The satellites are closer, there are going to be loads of them, and things like consumer-driven microelectronics and integrated optics have advanced massively since the design of Galileo was finalised.

 

 

Thanks for that assesment TM.Like I've said,this deal was totally outside my radar and so unsual in many respects that it';s worthy of a fuller consdieration by those who understand the issues.Much appreciated.

On 05/07/2020 at 13:04, jamtomorrow said:

Seen a few posts this week about technology companies, especially semiconductor companies, which reminded me of another perspective on deflationary forces in the economy. Short version:

• I wonder to what extent macro policymakers have a handle on Moore's Law acting as an exogenous deflationary force. This sort of thing: https://www.vanguard.co.uk/adviser/adv/articles/research-commentary/markets-economy/gmm-deflationary-effects-moores-law.jsp
• Is Moore's Law on borrowed time? The demise of Moore's Law has been oft-predicted, but the Schiffs of semiconductors will surely be right one day. Dennard scaling is sorta kinda the EROI of semiconductors, and we're certainly dicing with the physical limits (sound familiar??). This sort of thing: https://www.nextplatform.com/2019/06/18/dennard-scaling-demise-puts-permanent-dent-in-supercomputing/
• And finally, if both of the above are true, we could be in for the mother of all planetary alignments. Imagine all of these happening at the same time: money printing finally feeds through to inflation in the "real economy"; Moore's Law deflationary pressure drops below some critical threshold; macro-level EROI drops below the prosperity threshold

All makes me wonder whether there might be a few surprises left in store as to the magnitude and timing of the Real Big Kahuna i.e. bigger/sooner than we might think.

I'd never tyhought of this angle JT.There are aspects of infaltion measurement where some level of hedonic adjustment has meant that rising technology prices have never been fully refelcted in cost of living measures.

 

I'm off work now for a few days and will be going over these posts in my head while I wander about life.

The thing withj oil/energy is that it's something we physically see in terms of price/filling the car/heating the hosue that we sense and see the price inflation.With tech,that's jsut not the same..

On 05/07/2020 at 22:25, DurhamBorn said:

I think thats going to be one of the reasons we get so much printing.They will need to keep the curve down further out.Governments have a window to print and get things moving,likely a couple of years.Supply chains will contract backwards and although that will have good results in many areas,it will mean prices rising.

I was talking to a friend today who works for a big tier 1 supplier to the auto industry.They make chassis and body work etc.Employ around 2000 in their plant here.They have already laid off all temps (there were a lot) and he said they have been told 1 in 3 permanents need to go.Welfare in this country was already as economy destroying levels,and its about to explode higher.

Its going to get really interesting as inflation (already here now,prices are moving higher) grows and wages move towards minimum wage.Loads of people will want jobs,but nobody will want the jobs at the salaries on offer.Government needs to inflate the whole economy.

The economy becomes very different during inflation cycles.Some companies can see falling sales,but higher prices and so gain,others see input costs shooting higher with consumers unable to pay.

couple of very pertinent points there DB.I'd agree the govt has a couple of years before inflation starts to run.We're still mantaining 20%-25% cash balances in sterling mainly but I've warned family members there will come a time when we have to possibly go all in for a period.

we've reasoned it through on here that a credit defaltion will beget money supply increases.Given the vagaries of infaltion measurem,ent,particualrly for lower income deciles that spend a disproportionate amount of their take home on food and fuel ie non core infklation,this will usher in a period where it really will be atoss up as to whether it's worth working..

[sancho panza]

 

6 hours ago, Sideysid said:

What’s the consensus on here for Rolls Royce. Obviously suffering a triple whammy now and in the near future with air travel, luxury cars and the auto market. (Which is why the current share price is appealing to me)

My thinking is military contracts and other transportation with government monopoly money may make it a buy at this price or am I missing something?

 

We'll be buying but possibly not for a year or two.This mess has to play out first.Till then it's oil/gold/potash/utilities/uranium in that order for me.

8 hours ago, Harley said:

Metoo although a lot of printed money is backing the current rallies and a hell of a lot more may come, especially in the run up to the Presidential election in November this year.

I hope we get a "W" as, tbh, I suffered a mix of wimping out and being focussed elsewhere back in March.  I also think it could be healthy.  However, in a way I hope the equity rallies continue for now and they hit bonds as I think negative rates could be inbound so one last pop, especially if there's a later temporary flight to safety.  Not a long term hold for me though.

There's got to be an insolvency crisis inbound so the question is how will the market and our "flash the cash" administration deal with it.  I suppose a more severe scenario would be a bank, broker or other financial institution folding, destroying people's capital.  European banks are long due some heat. 

And government asset grabs could have unintended consequences.  May start to know the latter later today, or maybe in the small print ("consultations") for now.  The dollops of cash have to be backed up by coercion as the tendency so far seems to be to save and pay down debt, rather than consume.  The stick is cheaper than the carrot and they now seem to enjoy waving it around.  Makes them feel the same way as being effective does!

Note the authorities have alledgedly been speaking to a couple of wealth managers about wealth taxes and some pro press articles have been planted and there's been talk about those with the "broadest shoulders".  The problem with such taxes is they start with "them" and end up with "us".  And just having a job may constitute broad shoulders!

Attacks on wealth and capital are greeted with flight in the main.

Wealth taxes are expensive to implement and easy to duck if you're mobile(and people with capital generally are).The unintended consequences are huge when inward invesment starts plummeting.

Im note sure how we ended up with the 1% having so much of the assets but when I was a kid CEO's were paid a lot less than they are now in terms of mulptiles of the lowest workers salareis.

[jamtomorrow]

27 minutes ago, sancho panza said:

The thing withj oil/energy is that it's something we physically see in terms of price/filling the car/heating the hosue that we sense and see the price inflation.With tech,that's jsut not the same..

Exactly, tech deflation has mostly flown under the radar all this time.

Facetious calculation: data centres are now estimated to consume as much as 1.5% of the world's electricity. Now consider how much leccy it would have taken to sustain the same computing power using the semiconductor technology of, say, 10 years ago. Assuming performance per watt roughly follows Moore's Law, that's 5 doublings to "undo" i.e. 32x -> somewhere in the region of 50%.

Yes, it's a facetious calculation, but also kinda mind-blowing in terms of the energy economics.

(Edit because I can't do maths, 2^5=32 as any fule noes)

[Majorpain]

1 hour ago, Ellandback said:

If that amount of chicanery has been allowed thus far what stopping them from adding more, but as you say we'll soon find out. I listen to his TFMR daily podcast and find myself feeling sorry for him as he rants against the injustice after all these years. Reckon he's doing alright for himself though!

The other side of the coin is that it was simply a matter of buying up as much PM stuff as you could and waiting for something to change the rules of the game.

Ok, they managed to push the economic cycle to a rather extreme 11 years (2009-2020), but this was always nailed on eventually.

[DurhamBorn]

2 hours ago, Harley said:

Excellent bit of intel ta.  Eco stuff is quite a smokescreen for all sorts of deviousness.  You can add consultations on restrictions on the 25% pension withdrawal to a growing list.  A trend.  Going to get worse.

Its a big worry Harley if they mess with pensions.I think the most "reform" is likely on the way in though,getting rid of the 40% etc would really get them a lot of money and they can sell it as fair.The real big worry is if they move back the age you can access your pension.Im looking at 55 still just,but if it went back to 60 i wouldnt be happy.The problem they have isnt so much stealing wealth,its keeping the people who are robbed to pay for all the spongers (rich,poor and state workers) working.What is certain is i would put my pension in draw down the first day i could.

[DoINeedOne]

Harmony Gold the last few days has been crazy 

Shame i sold at $3.6 with a 30% profit so not all bad

Currently at $5.41 (+8.5%)

Gold $1816

[kibuc]

Fiore Gold with another record quarter, delivering almost 13k ounces. It will keep flying.

Wesdome deliveres another fantastic drill results from Eagle River.

HMY painful to watch from the sidelines.

[Sasquatch]

1 hour ago, DurhamBorn said:

Its a big worry Harley if they mess with pensions.I think the most "reform" is likely on the way in though,getting rid of the 40% etc would really get them a lot of money and they can sell it as fair.The real big worry is if they move back the age you can access your pension.Im looking at 55 still just,but if it went back to 60 i wouldnt be happy.The problem they have isnt so much stealing wealth,its keeping the people who are robbed to pay for all the spongers (rich,poor and state workers) working.What is certain is i would put my pension in draw down the first day i could.

Was talking to Mrs S about this today. I'm 55 in less than 2 years. Like you, I think I'm inclined to pull the trigger on it immediately (hopefully having seen nice rises in the value of stocks/PMs within the SIPP)

[sancho panza]

2 hours ago, jamtomorrow said:

Exactly, tech deflation has mostly flown under the radar all this time.

Facetious calculation: data centres are now estimated to consume as much as 1.5% of the world's electricity. Now consider how much leccy it would have taken to sustain the same computing power using the semiconductor technology of, say, 10 years ago. Assuming performance per watt roughly follows Moore's Law, that's 5 doublings to "undo" i.e. 32x -> somewhere in the region of 50%.

Yes, it's a facetious calculation, but also kinda mind-blowing in terms of the energy economics.

(Edit because I can't do maths, 2^5=32 as any fule noes)

I'm that sad I don't even know whata semiconductor does............however,I totally get your point about it being a force for disinflation and ref energy economics.

have you any idea how much of world supply bitcoin mining uses(not that I have nay idea how to mine a bitcoin but I have read that it's energy intensive

1 hour ago, kibuc said:

Fiore Gold with another record quarter, delivering almost 13k ounces. It will keep flying.

Wesdome deliveres another fantastic drill results from Eagle River.

HMY painful to watch from the sidelines.

 

I sold some Hochschild a week or two back at 205 and have some of the residual left to invest but real value is getting harder to find these days.

Fiore is unreal 34 cents in March now $1.33 CAD

Ref Wesdome, possibly the only PM miner we don't own that I'd like to.Like a complete fool I baulked at paying $3.70 CAD in Nov 18 when we were buying our second batch of PM miners.

At the time we bought some Hecla and Couer instead……………………....I'll get my coat....

[kibuc]

1 hour ago, sancho panza said:

I'm that sad I don't even know whata semiconductor does............however,I totally get your point about it being a force for disinflation and ref energy economics.

have you any idea how much of world supply bitcoin mining uses(not that I have nay idea how to mine a bitcoin but I have read that it's energy intensive

 

I sold some Hochschild a week or two back at 205 and have some of the residual left to invest but real value is getting harder to find these days.

Fiore is unreal 34 cents in March now $1.33 CAD

Ref Wesdome, possibly the only PM miner we don't own that I'd like to.Like a complete fool I baulked at paying $3.70 CAD in Nov 18 when we were buying our second batch of PM miners.

At the time we bought some Hecla and Couer instead……………………....I'll get my coat....

I'll admit to buying some HMY today, along with Eldorado. I made room by getting rid of Minera Alamos which I kind of lost patience with, though to be fair I got in at 0.20CAD merely 6 months ago. There might be more short-term re-rate potential in intermediates, methinks.

I'll also have to take a look at some of my silver miners which are underperforming... My goal is to beat SILJ and beat it well, but with PAAS and First Majestic going from strength to strength and pulling the entire index up I'm having hard time just keeping up. I need those juicy drills from SilverCrest and maybe Lindero update from Fortuna Silver to give me some advantage.

The danger, however, is in tinkering too much. I still remember that if I had kept to my original plan of just keeping 100% WDO until Sep 2020 (what an impeccable timing would that have been!), I'd be buying a house this year.

Fiore is going higher in my opinion. They've made upgrades to their crushing circuit over the last 3 quarters and it's showing. 50koz per annum is a possibility, with costs going down.

[sancho panza]

any comments welcomed.

I'll be spending some time with this chart tmrw.

https://www.longtermtrends.net/copper-gold-ratio/

[Hardhat]

@Cattle Prod 

WASHINGTON (Reuters) - U.S. Energy Secretary Dan Brouillette said on Monday that he blames activists for a pair of high-profile pipeline setbacks in recent days, including a court’s decision to force Energy Transfer Partners LP to close its Dakota Access crude oil pipeline over its environmental impact study.

 

A U.S. District Court on Monday ordered its operator Energy Transfer LP to shut and empty the line, the largest from the North Dakota shale oil fields, within 30 days due to an inadequate environmental impact study.

Separately, Dominion Energy and Duke Energy on Sunday announced they would cancel the Atlantic Coast Pipeline, meant to move natural gas from West Virginia to East Coast markets, due to “ongoing delays and increasing cost uncertainty” surrounding the project.

https://www.reuters.com/article/us-usa-pipelines-brouillette/us-energy-secretary-blames-activists-for-big-pipeline-setbacks-idUSKBN24722E

 

In context does this mean even more of a supply squeeze, but in a shorter term than we've talked about before with shale declining?

[sancho panza]

22 minutes ago, kibuc said:

I'll admit to buying some HMY today, along with Eldorado. I made room by getting rid of Minera Alamos which I kind of lost patience with, though to be fair I got in at 0.20CAD merely 6 months ago. There might be more short-term re-rate potential in intermediates, methinks.

I'll also have to take a look at some of my silver miners which are underperforming... My goal is to beat SILJ and beat it well, but with PAAS and First Majestic going from strength to strength and pulling the entire index up I'm having hard time just keeping up. I need those juicy drills from SilverCrest and maybe Lindero update from Fortuna Silver to give me some advantage.

The danger, however, is in tinkering too much. I still remember that if I had kept to my original plan of just keeping 100% WDO until Sep 2020 (what an impeccable timing would that have been!), I'd be buying a house this year.

Fiore is going higher in my opinion. They've made upgrades to their crushing circuit over the last 3 quarters and it's showing. 50koz per annum is a possibility, with costs going down.

Its difficult not to tamper.Over the last year I've sold a fair few I wasn't ahppy with eg Hecla/Couer/WRN/Amarillo/SGI/GUY(jsut before they trebled recently). I took some profits elsewhere to subsidize the losses,but the main purpose was to focus the portfolio over fewer stocks(currently 28---spray n pray) and with a proportionate exposure to risk ie loading the top line with Tier 1's and 2's and then the riskier stuff in smaller sizes on lines 4 and 5.

Most of these 28 have been held since purcahse in 2017/18/19/20 and added to where value looked good.But it's been a sharp learning curve at times.

Ref the silver miners I've been researching their running time in the prvious bull runs and have psoted on thsiu before ie they run late and hard like silver.I'm looking to start selling the 2017 batches of GFI/AU and plan to put it into the silvers but not yet.I'm not sure we've seen the monthly peak in either of thsoe two yet or HMY/NWM,these are some the early peakers from what I can see.Personally,I think thsoe silver miners will end up turning your biggest profits.

Have you studied the copper gold ratio much?

Edit to add-on Fiore,I looked pondered and and by the time I was ready it was gone.......looks a great prospect.

[Talking Monkey]

3 hours ago, sancho panza said:

Its difficult not to tamper.Over the last year I've sold a fair few I wasn't ahppy with eg Hecla/Couer/WRN/Amarillo/SGI/GUY(jsut before they trebled recently). I took some profits elsewhere to subsidize the losses,but the main purpose was to focus the portfolio over fewer stocks(currently 28---spray n pray) and with a proportionate exposure to risk ie loading the top line with Tier 1's and 2's and then the riskier stuff in smaller sizes on lines 4 and 5.

Most of these 28 have been held since purcahse in 2017/18/19/20 and added to where value looked good.But it's been a sharp learning curve at times.

Ref the silver miners I've been researching their running time in the prvious bull runs and have psoted on thsiu before ie they run late and hard like silver.I'm looking to start selling the 2017 batches of GFI/AU and plan to put it into the silvers but not yet.I'm not sure we've seen the monthly peak in either of thsoe two yet or HMY/NWM,these are some the early peakers from what I can see.Personally,I think thsoe silver miners will end up turning your biggest profits.

Have you studied the copper gold ratio much?

Edit to add-on Fiore,I looked pondered and and by the time I was ready it was gone.......looks a great prospect.

SP wouldn't they generally follow Silver up in lockstep with their Beta, or would they run with a lag to the silver price. If Silver gets to mid 20s it would be phenomenal for the miners considering how theyve done from the 4-5% move in Silver prices last few days. Looks a possibility of mid 20s ahead of the election

[MrXxxx]

21 hours ago, Harley said:

Agreed.  I've been looking hard.  Not got huge sums but thin edge of a big wedge well beyond just finance.  Currently thinking international van life or a boat.

Well at least they can get you for council/property tax...not a long-term solution though is it? I.e you have got to think about a base for when you get older.

[MrXxxx]

16 hours ago, DurhamBorn said:

Its a big worry Harley if they mess with pensions.I think the most "reform" is likely on the way in though,getting rid of the 40% etc would really get them a lot of money and they can sell it as fair.The real big worry is if they move back the age you can access your pension.Im looking at 55 still just,but if it went back to 60 i wouldnt be happy.The problem they have isnt so much stealing wealth,its keeping the people who are robbed to pay for all the spongers (rich,poor and state workers) working.What is certain is i would put my pension in draw down the first day i could.

I sitting, ready to `pull the trigger` if they do!

[sancho panza]

10 hours ago, Talking Monkey said:

SP wouldn't they generally follow Silver up in lockstep with their Beta, or would they run with a lag to the silver price. If Silver gets to mid 20s it would be phenomenal for the miners considering how theyve done from the 4-5% move in Silver prices last few days. Looks a possibility of mid 20s ahead of the election

It's when Silver gets to the $40's things get interesting,I'm not that bothered by silver in 20's.Ref thsi bull ,it really is different this time in that the banking system is on it's last legs.Even the traders amongst us will be torn as to whether to totally divest PM exposure at the top givne how rotten things are in Londinium.

My thesis is that we'll get a couple of blow off phases in the run up to the late 2020's when as @DurhamBorn is predicting,things will got to ratshit in quick order and we'll see PM prices @Errol  has referred to since ToS.I'm struggling to see an alternative outcome and welcome thoughts as ever.

 

dyor natch

History has a sample size problem on gold/silver bull markets.However,the few occurences of blow off phases we have, do have offer some light imho

key take homes for me from the sample size available is that

1) Silver runs later but harder than gold

2) Silver peaks before gold on the three occasions I'm looking at 2x by 2 weeks , 1x 5 months

3) Silver peaked in April 2011 with the bulk of the gold miners(using weekly charts for reduced noise)

4) G/S ratio called the weekly tops in miners and silver perfectly in 1980/2011

5) Silver looks to be a viable mechanism for timing gold miners.

 

Gold

from mid July 79 to jan 80 gold went from $279 to $703= 151%

Sept 07 $706 to  Mid march 08 $975=38%

July 10 $1166  april 11 $1508=29%     although if we use the later actual gold peak Sept $1896 = 63%

 

 

Silver

silver mid july 79 went from $9 to $49 in Jna 80=444%

Sept 07 $12.1  to Feb 08 $19.63= 62%

July 10 $17.6 to April 11 $44.79= 154%