Global Debt – LewRockwell

The coming gold and silver surge is guaranteed. It is not a question of IF but only WHEN. Initially, the imminent revaluation of the precious metals will have nothing to do with an investment mania but with the total mismanagement of the world economy. A spectacular rise in the metals is just a reflection of the mess the world is in. But as the paper market fails in gold and silver, there will be panic and manic markets.

So has the Silver Rocket just started? Last week I talked about the coming silver explosion and we could be seeing the beginning of it right now. I have often talked about the Gold-Silver Ratio as the key to the turn up in the precious metals.

GOLD-SILVER RATIO – A LEADING INDICATOR

With bearish divergence on momentum indicators at the critical 80-84 level, it was always a matter of time before the Gold-Silver ratio would break down. When the ratio turns down from an important level, it signifies a turn up in the metals with silver leading the way. As the long term chart below shows, the target for the ratio is 15-30. A return to the historical level of 15 would mean that silver will move up 6x as fast as gold.

If we look at the Weekly chart of the Gold – Silver ratio below, it shows the 4% fall that has taken place in the last 10 trading days. In itself this fall might not seem significant. But the key is the reversal from a very important top area combined with bearish technical indicators. As the chart shows, this ratio can fall very fast once it starts, like the 65% fall in 2010-11 or the 23% fall in 2010.

ONLY ONE SOLUTION TO THE GLOBAL MESS

Normally I avoid talking about short term moves since they make no difference to the long term strategic picture, especially from a wealth preservation point of…

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