I hope you understand the fallacy here. You can do better than this, and by better I mean more intellectually honest or sophisticated depending on the original motives/nature of your post. You really need to look at S&P versus a huge basket of instruments/goods to get any kind of realistic output unless you have an agenda to push. I can pick all sorts of things (commodity or otherwise) and price the S&P 500 against it and you'll see something similar. Like how about I price the S&P 500 in shares of AAPL? How about versus nat gas, I bet that makes the S&P return looks great against nat gas! At least do something like price it against the CRB: http://bigcharts.marketwatch.com/ad...sToggle=false&chartStyleToggle=false&state=12
I more drawing to the conclusion of currency devaluation around the world and gold in another form of currency. The other thing is to point out is the extreme disconnect between treasuries and equity prices in USD. Just showing how much intervention in the market there really is. I agree you should weigh it versus a variety of assets. I have no agenda to push.
Yes well when your central bank pegs their 10 year these sorts of odd (I like to call them "perverse") things can and do happen. I don't believe gold is the "reliable currency" it is purported to be lately. I've heard this song and dance before and then witnessed the multi-decade annihilation of gold bugs afterward. The problem is all of these single commodities go through wild boom/bust cycles (even diamonds which are my favorite hard "currency" to watch) and occasionally mega bubbles. All paper/digital currencies are crap though, by the nature of their users/abusers they eventually approach 0 over a long enough time-line. Some faster than others. Another depressing chart for you to consider is S&P 500 priced in Yen...
If we had actual deleveraging in real asset prices gold would get crushed. Paper currencies/digital paper is junk and always goes to 0 fiat currencies never have tested time. Commodities do cycle and Gold will not go to 10,000 we will asset prices would be insane and the economy wouldn't function. That much currency devaluation would really destroy the economy gold has a more likely chance of going to 1,000 before 10,000. Also with the Fed selling the short end and buying the long end, why short treasuries the Fed is buying them and will keep rates down. If yeilds get anywhere around 2.25 I would be getting long bonds. I keep hearing these bond bears saying short bonds!! Yeilds are going to 4%! I'm like umm yea if yeilds start going up like that guess what Gigs up and we gonna have way bigger problems. With Fed intervention you can be long bonds any time that yield starts to creep over 2. They're buying almost 85-90% of the long end anyways! Rule for trading follow the money. That is central banks balance sheets. Classic Don't fight the Fed and BuyTheF------Dip!!!! lol
I am curious as to what you think the Fed and government will do to keep our currency from devaluing? Right now they are on a printing spree and I don't see an end to that.
It is the job of a goverment to intervene. This is why it is elected. I do not understand your agenda. You do not like the fact that the FED intervenes in the markets to protect the intersts of the people that it serves? Next, you are also delusional that gold can ever become a currency again so that some tribe in Africa after discovering a lot of gold can turn to a superpower overnight. People are also delusional when they think that we did not have deleveraging because gold did not crash. Most of the buying in precious metals came from China and India at a time when they had inflation while the US was in deflation. Low dollar helps American exports and puts pressure on China. The pain from that on American consumer is part of the price that must be paid to curb China's growth.
US will never run out of ink and you will probably not make as much on the average over the next 5 years investing in precious metals over investing in stocks. Dow will climp to new highs in the next couple of years. When China and Indica go into recession or even deflation, precious metals will plunge like nothing you have ever seen.