Silver Setting Up
70s Style Rally In The Midst Of Financial Collapse?
By Hubert Moolman
We are currently at an important point of the economic cycle. The end or peak of debt-based assets, and the significant appreciation of real assets like gold and silver.
An example of the
last time we were in a similar position is the late 70s. The Dow was
at or near peak levels after a multi-decade bull market, while gold
and silver was in the midst (or end) of a consolidation (or
correction).
The Dow could only
start a new bull market after gold and silver had huge blow-off tops.
Below, is an
illustration (on silver charts from tradingview.com) of how the
current situation is similar to the late 70s :
The
bottom chart is silver from 1966 to the end of 1979 and a few years
beyond, and the top is silver from 1989 to August 2019. I have
highlighted key events on both charts to show how the structure of
the two bull markets could be similar. The current structure is
bigger in terms of time.
The
Dow/Gold ratio peaked in January of 1966, before the start of the
precious metals bull market. In a similar manner the Dow/Gold ratio
peaked in August 1999, before the start of the silver and gold bull
market.
Some
time before the first important peak of the silver price in February
1974, the Dow again made a significant peak(in January 1973). This is
very similar to the October 2007 peak of the Dow, which came before
the April 2011 peak in silver.
Again,
after the Dow peak of February 1974, there was another significant
Dow peak in December 1976, some time before the peak of the silver
bull market in January 1980. The Dow recently made a peak, which
could be its ultimate peak for its long running bull market. If this
is actually the peak, then it is similar to the Dow peak of December
1976, which came some time before the peak of the silver bull market.
So,
if the Dow top is actually in, we could be in the midst of a
multi-year silver rally like the one from 1976 to 1980. However, this
time the structure of the current financial structure is likely too
weak to continue in its current form, and the problems (or debt) is
far too big.
It
will collapse eventually. The only question is: how far into the
current silver rally will it be able to survive?
For
more of this kind of analysis, you are welcome to subscribe to my
premium
service. I have also recently completed a
Silver
Fractal Analysis Report as well as a Gold
Fractal Analysis Report.
