Phase II starts in Australia

For the US markets, the historical ratio data is readily available. I would expect that similar data is available for most countries. Even if the ratio analysis has not been done for AU, the base data to create the ratios should be available. For me, the dow-gold ratio shows an extremely clear pattern that leads me to believe the ratio will go below 1-1. Since I don't believe the US stock market is going to crash, I expect gold to go much, much, higher. Maybe the US market does crash or maybe the ratio doesn't go to 1-1. The historical top for gold of the gold-US real estate ratio has been around 100oz-1 average house. I need to understand what they mean by that average house, but that ratio is far closer to a top/bottom than the dow-gold ratio.

One area I need to research is the gold-silver ratio. However, because of tax consequences, I may not make any change in my gold/silver allocation. Another ratio that I hope to research is the CCI-Gold ratio. So many ideas and so little time.

Julie you asked for a theoretical case study. Let's say I move to NZ and find a homestead(s) that I would like to buy. When I believe the gold-NZ real estate ratio is anywhere near a historical peak, I would begin making offers in gold, silver or both. In this situation, gold and silver are probably going to be scarce and the prices will be in the middle of parabolic moves. Since there will be a period of time between acceptance and closing, the real estate owner will likely figure that the gold/silver will move much higher before closing and the "real" sales price will be much higher. Theoretically, that is likely to be true. In that scenario the seller will be more eager to sell to me than someone offering a fiat price. Obviously, I could make the offer where the amount of gold/silver ounces are based upon their fiat value and that might be enough if the pms are scarce. Right now, the basic plan is all I need. Owning physical pms and pm stocks gives me the flexibility to adjust to the opportunities that arise near the end of the pm bull market.

 

Here is a video from endlessmountain. His price projections don't interest me as much as the fact that he states that there are 4 phases to the silver bull market. Since most writers talk about 3 phases, I am curious where he got the 4 phase theory.

http://www.youtube.com/watch?v=izTg_Q3sc1E

 

So 100oz @ $1400/oz = $140,000. Maybe not an average house, but apparently there are some reasonable houses available for that money.

 

The last time I saw an updated chart was early 2010 and it still had close to 300oz for an average house. That would have been at least $330,000. You will have to convert to sq meters, but that was about $110 sq. ft. for a relatively new brick home in my town. I wouldn't consider that average, but who am I to decide?

Schilling is the one who does the housing index and his chart is inflation adjusted back to 1890. At the peak of the US real estate market in 2005/2006, the index was at 200. The three previous peaks 1890s, 1970s & 1980s, were around 125. That gives you an idea of how extreme valuations were. Prices have declined and the index is around 150, so inflation could reduce the real values of homes down to the 100 baseline without any further nominal price declines.

 

on the way from Amazon!

 

+1, I still think we are mid way through phase 2 (maybe 3/4 through at most). We havn't even got into mania phase yet where people will happily pay any price to get their metals. How can it be phase 3, when the comex hasn't even defaulted on its delivery obligations yet.

Ignoring the comex, phase 3 will happen when the general public just want metals. At the moment its the smart investors and sharks that are circling the comex / LBMA and their metal shortages. Wait for the general to start stampeding in with massives amounts of money.

Slam

 

Just heard on SEN radio here in melbourne an ad for the Australian Bullion Company, and to invest in gold for your retirement. Make of it what you will.

 

Even if you had to pay what they sold it for it would have been a bargain.

 

Ouch!

 

There is a lot of big money out there .... and trillions of dollars of derivatives out to burn people ....
it could get very interesting .....

 

s nnnnnnnnnnnnnnnnooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooooo w

 

I'd be interested to know whether these shops are franchised and whether it's a bank or otherwise. It's also very interesting that while USA is harvesting its population's gold, China is parking tonnes with its population.
Perhaps there's nothing to it and confiscation is just sitting on the books so there is 'no plan', but just because you're not paranoid doesn't mean they haven't got their eyes on your stack.

 

Regarding the 'Phase' scenario... alot more general public, or people already in the silver circle, are buying silver. Went to the Perth Mint Shop 2 weeks back (retail arm, not Perth Mint themselves) and they had no silver to sell whatsoever apart from 1oz rabbits. Was in the queue and an elderly guy had a money bag in his hand.. thought to myself 'Jesus, looks like this guy is going all in' .... ended up asking for a 1oz kook, god knows what the money bag was for Still, good on him i guess. Had my fractional gold lunars though... sweet.

Anything could happen next year, another crisis could happen that will initially send the price of pm's south

 

GP and others have covered this before. The PM shop is just one part of the PM. If the shop runs out of something that does not mean the PM has sold all of its silver. It just means the shop is out of that particular item.

 

I know someone who has a very interesting theory that Phase 1 did not start until 2005. His research indicates that 2001-2005 was just a decline in USD. He says that gold did not rise against other currencies during 2001-2005. If so, then he is likely correct. That would allow for Phase 2 to have started much later than most of us would have thought. Since Phase 1 would be 4-5 years shorter than previously thought, that means Phase 2 could be just 4-5 years and still be the longest phase. Since my analysis of the dow-gold ratio shows a topping area in about 5 years, his theory matches my very basic TA work.

I believe Richard Russell has written that we are in the latter part of Phase 2. He certainly has more historical perspective than most of us. However, I still find very few people who are interested in gold or silver.

 

2003 marks the nadir according to POS graphs on infomine. Therefore, the stealth phase ends there, imo.

If phase I is defined in part by minimal price change, then 2004 markes the onset of accumulation.

Bear in mind this way of looking at things is very qualitative and may not reflect the underlying dynamics at all.

 

Russell is a Dow Theory buff. His website, which I scanned over recently, form memory states that he read the orginal documents, presumably the WSJ editorials.

I'm not sold on qualitative theory as a stand alone model. A recent example of why you shouldn't reify it is one of the 24hgold contributors, Ron Rosen. We haven't heard much from him lately. You may remember him as the guy who finishes every article with a picture of a bald guy and rainbow, signed with "Simeon, a picture of patience".

We've all heard the phrase "time in the market is better than timing the market". Well, Rosen is in the other camp, and informs his subscribers to time the market, based on Elliot waves (a theory which seems pseudo-quantitative to me).

Rosen instructed his readership that a massive fall in the POG was, acording to this theory, due to fall in 2010, specifically November 2010. It hasn't and there is little time left in the year. Instead of falling since the beginning of November, the POG has ambled along

I personally think that a correction to about 1000-1100 would be in keeping with a long term bull trend, but Rosen was of the view that the end of the bullmarket was November 2010, making the call in February. From recollection he published several subsequent articles, pencilling in his extrapolated elliot wave of death, taking the POG to sub 1k.

Here is an example of Rosen's folly, this time with the POS:

"Silver Approaching Major Bear Market Breakdown, Gold Would Target $970"

http://www.marketoracle.co.uk/Article21219.html

He made a call for a big breakdown in the POS on July 19 2010. Instead, precisely the opposite occurred as the POS completed a large inverse H&S and rocketed up to $30. A move to 29 or thereabouts was predictable based on its previous moves since 2003, if one is to speculate about price moves.

And now I see Rosen is predicting a huge move up silver:

"Silver Monster Move in the Making"

http://www.themarketoracle.biz/index.php?name=News&file=article&sid=25003

Just be careful with theorists of this nature. They'll get it right only some of the time. QE seems a better reason to own metal.

 

in terms of this chart do you think we would be in the "denial" stage for property?