Saturday, November 11, 2017
Incredibly, all seven unfolded in similar fashion to what we’re seeing in our market!
These are occasions in history when the price action in a particular market is so exceptional that it’s unprecedented in the history of that individual market. As such, one has to look at the history of all of the major markets and asset classes in order to find parallels which will shine light on what’s taking place.
As you know, the price of gold dropped 46% from Sep 2011 to Jan 2016. At the same time, precious metals stocks as measured by the HUI Gold Bugs Index declined a whopping 84%. There are only a handful of markets in history which have suffered meltdowns of this magnitude.
As it turns out, these 7 closest fit precedents are sugar (1923), coffee (1923), S&P 500 (1933), sugar (1967), platinum (1983), silver (1983) and cocoa (1984).
You’ll notice that the price moves in the stock market during the Great Depression and the price moves in the silver & platinum markets after the 1980 crash are 3 of these 7 precedents. That underscores just how remarkable the moves have been in our markets.