Wednesday, June 7, 9:33 pm EST. I thought this was incredibly intriguing!

 

“It’s one of biggest extremes we’ve ever seen…

Are we approaching another massive turning point in the markets? If the following chart is any indication, the answer is a resounding yes…

The chart shows the commodities-to-stocks ratio over the past 47 years. This ratio compares commodities – as tracked by the S&P GSCI Commodity Index – with the benchmark S&P 500. The red circles show times when commodities have become extremely expensive relative to stocks. And the blue circles show times when commodities have been extremely cheap compared with stocks.

As you can see, this ratio has now fallen to an extreme rarely seen over the past five decades…

In fact, it is now even lower than either of the previous two bottoms…

Some of you may recall the first… It was just before President Nixon took the U.S. dollar off the gold standard. Over the next several years, inflation shot higher… commodities soared… and stocks entered a brutal bear market.

The second bottom occurred just before the final run-up in the dot-com boom. Again, over the next decade, commodities dramatically outperformed stocks. The broad GSCI Commodity Index rose nearly 300% from January 1999 through the end of 2007, while the S&P 500 gained less than 30%.

Today’s historic lows suggest “real” assets could once again be set to beat financial assets over the next several years.

This could also be great news for gold in particular… As Luke Gromen – founder of macroeconomic research firm Forest for the Trees – noted this week, gold soared nearly 1,800% and 600%, respectively, following the last two lows.”

 

Let’s see how this might play out. I think that, for the metals, and our miners, it’s going to be a phenomenal run. How soon? Can’t say, but I hope that I’ll know it, when I see it!

Harold

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