Feb 11

YES!!!

And it has only just begun.


oil-gold-ratio

Is This The Biggest Crisis In History?:

Talking of Oil and Gold, last week Deutsche Bank showed a long-term graph of Oil in real adjusted terms, showing that the average real price since 1861 was $47.

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Following on from that, Deutsche notes one ratio they occasionally look at is the ratio of various assets to the price of Gold…

Today we update the Oil/Gold ratio back to 1865 and find that the Gold price has just hit an all time high at around 44 times the price of Oil.

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The previous high of 41 in 1892 has just been exceeded.

For perspective, the ratio was at 6.6 in June 2008 and only 12 in May 2014. The long-term average is 15.5. While this says nothing about where the ratio is going in the short-term surely this looks a good trade to exploit over the longer-term for those who care about such things.

However, as we noted recently, it merely predicts a crisis and according to the chart above it is the biggest crisis in history…

oil-gold-ratio

The previous “biggest crisis in history” was in 1893 when a serious economic depresion hit America. We just topped that in terms of the gold/oil “crisis” ratio, making us wonder: what crisis is just around the corner, and just how big will it be?

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