More On The Crashing Velocity (Circulation) Of Money
John Williams' "Shadow Government Statistics" M3 and GDP charts, see http://www.shadowstats.com/alternate_data, jive with the BullandBearWise crashing Velocity (circulation) of Money chart, see http://www.bullandbearwise.com/VelocityChart.asp.
Since the Velocity (circulation) of Money is defined as GDP divided by the M3 money supply, the "Shadow Government Statistics" GDP and M3 charts show the declining GDP versus a sharply rising M3, which means that an increasingly small number (GDP) is being divided by an increasingly large number (M3), which means that the Velocity (circulation) of Money is crashing, as the BullandBearWise chart shows, see http://www.bullandbearwise.com/VelocityChart.asp.
M3 isn't inflating the US economy at all, since GDP is plunging even though M3 is spiking (+17%+ year over year growth rate and rising), so, the gold pimps are all wet as usual.
The unraveling of the (abused) credit/debt instruments (CDO's, securitizations, etc) is causing the velocity (circulation) of money to crash at probably/very likely an even greater rate in recent months, which is a very deflationary/bearish situation for gold/silver. The Fed's ability to inflate the US economy out of the current huge deflationary mess is very limited.
My previous 18 month $500-550 cycle low target range for gold's Wave 2 Cyclical Bear Market is probably too optimistic. Probably 2-3 years and $450-500 is more realistic, given the extremely deflationary environment.
.......http://www.JoeFROCKS.com/ .
NEM XAU HUI
Since the Velocity (circulation) of Money is defined as GDP divided by the M3 money supply, the "Shadow Government Statistics" GDP and M3 charts show the declining GDP versus a sharply rising M3, which means that an increasingly small number (GDP) is being divided by an increasingly large number (M3), which means that the Velocity (circulation) of Money is crashing, as the BullandBearWise chart shows, see http://www.bullandbearwise.com/VelocityChart.asp.
M3 isn't inflating the US economy at all, since GDP is plunging even though M3 is spiking (+17%+ year over year growth rate and rising), so, the gold pimps are all wet as usual.
The unraveling of the (abused) credit/debt instruments (CDO's, securitizations, etc) is causing the velocity (circulation) of money to crash at probably/very likely an even greater rate in recent months, which is a very deflationary/bearish situation for gold/silver. The Fed's ability to inflate the US economy out of the current huge deflationary mess is very limited.
My previous 18 month $500-550 cycle low target range for gold's Wave 2 Cyclical Bear Market is probably too optimistic. Probably 2-3 years and $450-500 is more realistic, given the extremely deflationary environment.
.......http://www.JoeFROCKS.com/ .
NEM XAU HUI
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, SPX, XAU
posted by Joe Ferrazzano at
3:26 PM
7 Comments:
Many gold stocks have been in a Cyclical Bear Market since well before the March 14/17 2008 XAU/HUI likely Wave 1 Cyclical Bull Market cycle highs.
There's been a stealth Bear Market in "junior" gold/silver stocks. Some are down -80% to -90%+. Take a look at WITM.OB, GPXM.OB, IAG, GRS, NG, SDRG, MNEAF, LNXGF, etc to name a few.
By
Joe Ferrazzano, at 8:25 PM
SA, SMXMF.OB (down -65-70%+), SRLM (down about -70%+) are three more.
By
Joe Ferrazzano, at 8:34 PM
Ask a gold pimp, if gold is so great, supposedly a hedge against inflation, how come gold is where it was 28 frickin years ago?
If gold stocks are so great, how come so many imploded as gold soared. Part of the answer is that gold stocks lead the metal. HUI/XAU entered a Secular generational Bull Market in late 2000 versus gold doing so in April 2001.
By
Joe Ferrazzano, at 8:39 PM
PMU, BMD (down roughly -90%) are a couple more.
Remember, professionals focus on risk, amateurs focus on reward. The gold pimps have led a lot of investors and traders to disaster.
By
Joe Ferrazzano, at 8:44 PM
The uranium stocks are another disaster area, CCJ, URRE, URZ, FRG, USU, etc
By
Joe Ferrazzano, at 10:36 PM
MXOM, MEXORO MINERALS LTD, a thinly traded stock, might have just entered a Cyclical Bull Market last week, after falling from 1.94 in November 2007 to 0.33 last week.
Not a recommendation, I don't make recommendations, I'm just pointing out that it hit a 5%+ follow through major buy signal/technical breakout on Friday 5-2.
By
Joe Ferrazzano, at 10:46 PM
CDE, Coeur D' Alene Mines, has fallen over -40% the past two months and appears to have entered a 1-2 year Cyclical Bear Market.
There should be a countertrend Wave B intermediate term upcycle the next two months or so, which will be a good opportunity to exit CDE, if that's your intention.
By
Joe Ferrazzano, at 10:57 PM
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