Inflation Adjusted Price of Gold and Silver - Revisited

[Country]

I have to say that we are really on a roll here with our PMs. I guess we shouldn't get too comfortable because that's when nasty corrections usually occur; when everyone has bought and buying diminishes. Let's hope the exponential wave takes us all to much higher levels before that occurs.

I was looking at the inflation adjusted highs for GOLD ($2275) and SILVER ($132, based on the Hunt Brothers $49 SILVER). Well, it appears that we are catching up, in a short time period, to these inflation adjusted highs. It reminds me of the US stock market that languished from 1969 to 1981 at Dow 1000. While the Dow moved up from 1000 during Reagan Presidentcy, it was only at 3800 in 1994. Over the next six years, the Dow moved up rapidly to hit a high point in 2000. We've had a stagnating broader stock market here in the US for a decade now. However, for 20 years there was a BULL market, averaging 15% a year.

SILVER and GOLD appear to be in the appreciation phase of their BULL market right now. Ever since the old highs were made in 1980, PMs went into a BEAR market that lasted 20 years, until a resurgence in 2001. PMs have been in a secular BULL market for the last 10 years. IMHO, we should have another 10 years to go. If we use the analogy of the US stock market, the next 10 years of the PM BULL would see a tripling of prices for GOLD from here. I'd say, sans a complete currency collapse which has a higher probability each year, that would see GOLD at $4000. Since SILVER appreciates twice as fast as GOLD, we could easily see SILVER be 6X what is is now, at $150 per ounce.

However, current government and soverign miscalculations and currency debasements are accelerating the schedule beyond a normal BULL market scenario. Further, naked short selling condoned by government appears to be coming to an end after many years of stifling the price of PMs. All these factors tell me that the BULL market in PMs is going to move to an accelerated schedule, reaching projected multi-year levels in a very short time period. So, I'd say that we're heading to $4000 GOLD and $150 SILVER soon. The schedule has moved up. Prepare yourselves for the ride that comes only once in a generation.

[TXBullion]

Thanks for the insight Country. I remember reading something in a book my Nassim Taleb (dont rember which one but not the black swan). It stated the Dow was at 1000 for a very long time. Then in a short time, surged to 10000 and stayed since.

[beauanderos]

I would say the ride we are about to experience happens far less frequently than once a generation, more like once in a century. Indeed, the particular ride we are on has never departed before.