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The Return of Stagflation – Gary Christenson

by Gary Christenson, Sprott Money:

Steve St. Angelo wrote an insightful article relating the silver to gold ratio to the S&P 500 Index. I encourage you to read his articles and analysis.

My commentary on the silver to gold ratio:

The following graph shows the SI/GC ratio versus the S&P500 index beginning in August 1971 when President Nixon severed the final gold backing of the US dollar. Currency in circulation, debt, consumer cost of living, and most prices including gold, silver, crude oil, and the S&P rose in devalued dollar units.

The two lines follow each other over long periods, and diverge during other periods. The next graph shows the same monthly data but smoothed with a ten month moving average. I divided the graph into four sections:

August 1971 – January 1980. The dollar “floated” lower, silver and gold rose in a parabolic bubble, the economy grew slowly, and “stagflation” was dominant in the United States.
February 1980 – February 1991. Gold and silver corrected and silver hit a low of $3.51 in February 1991. The S&P moved higher.
March 1991 – April 2011. Silver rallied from $3.51 to nearly $50.00.
May 2011 – February 2017. Silver and gold corrected and the S&P rallied.

Read More @ SprottMoney.com

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