The "price" of anything is a measurement of something just as a "mile" is
a measurement of something. A mile measures distance, a "gallon" measures volume
and a "pound" measures weight. But because the actual "value" of a currency
can fluctuate, the "price" of the food in the grocery store to the "price" of
a share of a stock exchange can move up and down without a change in value
of the item itself.
So how does this understanding help us with investing?
If we can get a sense of what is happening with the value of the measuring
stick, dollars, then we can invest in assets that benefit from currencies that
are strengthening or weakening.
The above chart is a proprietary index comprised of Commodities, US Stocks,
Global Stocks, Bonds and Real-estate. We are closely watching this chart to
see if "assets" in general are ready to break above the multi-year resistance
level. Note what happened when the price of silver was in a similar setup:
Note above how the price of silver, back in 2011, looked very similar to the
setup of the first chart that we showed you. Look below to see what happened
when silver eventually broke out of that pattern.
Should the Investment Asset Index break higher, we expect the effects of inflation
to become the new dominating theme where assets and prices in general head
higher. If currencies in general are losing purchasing power then we believe
that assets such as Silver and Gold will be fantastic investments to be positioned
in.
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