With everyone focused on the devaluation of the Chinese yuan and the subsequent chaos in global markets, today King World News thought it was a good idea to take a step back and look at the big picture of the war between gold and the Federal Reserve. This led to a remarkable question: Is the price of gold headed to $20,000?
MacroTrends: "This chart (below) shows the ratio of the gold price to the St. Louis Adjusted Monetary Base back to 1918. The monetary base roughly matches the size of the Federal Reserve balance sheet, which indicates the level of new money creation required to prevent debt deflation. Previous gold bull markets ended when this ratio crossed over the 4.8 level."
King World News note: The chart below reveals just how far the bull market in gold has to run before it ends in exhaustion. Gold would have to advance 17.8-times in price vs the monetary base in order to hit the 4.8 level highlighted above. If the monetary base just stayed stagnant and the 4.8 ratio is hit, that means the gold price will be at $20,000.
King World News note: There is a massive chasm between the Fed's balance sheet and today's gold price. This is one of the many reasons the gold price is set for a historic upside surge (see chart below).
Fed Balance Sheet vs Gold Price
King World News note: This shows the long-term Gold/Oil Ratio moving solidly in favor of gold. The chart update is delayed because the current level is now at a staggering 26:1 (see chart below)!
King World News note: The massive change in trend in the Gold/Oil Ratio chart above is the reason why the mining shares are now under strong accumulation. The smart money is buying while the mining shares are at an all-time historic low vs the gold price (see chart below).
Multi-Decade XAU vs Gold Ratio
King World News note: The bottom line is whether the price of gold is headed above $20,000 or not, investors should be accumulating physical gold and silver while they are highly discounted because of U.S. Fed interference in these key markets. ***KWN has now released the incredible audio interview with 50-year veteran Art Cashin, where he discusses why the worldwide liquidation scramble could morph into a full-blown 2008-style collapse, the chaos in China, global stock markets, commodity markets, whether the U.S. stock market has finally put in a major top and much more, and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
***ALSO JUST RELEASED: Forget Hindenburg Omen And Death Cross – This Alarming Event Just Happened For The 5th Time In History And The Other 4 Times The Stock Market Collapsed More Than 33%! CLICK HERE.
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If you are interested in purchasing physical gold and silver for delivery you can call Steve Quayle or his staff at (406)586-4842, or you can email them at tyler@safetrek.com or info@sqmetals.com
The audio interviews with Rick Rule, Gerald Celente, Bill Fleckenstein, Dr. Paul Craig Roberts, Robert Arnott, Eric Sprott, John Mauldin, Stephen Leeb, Egon von Greyerz, Nomi Prins, Andrew Maguire, Michael Pento, David Stockman, Chris Powell, Dr. Philippa Malmgren, Marc Faber, Felix Zulauf and Rick Santelli are available now and you can listen to them by CLICKING HERE.
