With everyone focused on the escalating conflict in the Middle East and the fact that the ECB is preparing to unleash a monetary bazooka, 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: Are these massive market distortions created by the Fed and other Western central banks leading to financial chaos that will propel the price of gold to $20,000?
“If the Fed raises interest rates at the beginning of a recession they could trigger a stock market crash and depression. Could they be that stupid?” — Michael Belkin, the man who advises the most prominent sovereign wealth funds, hedge funds, and institutional funds in the world.
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 over 17-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 close to $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 25:1 (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 to $20,000 or not, investors should be accumulating physical gold and silver while they are highly discounted because of U.S. Fed and other Western central bank interference in these key markets. ***To listen to one of the most extraordinary interviews ever with Dr. Paul Craig Roberts CLICK HERE OR ON THE IMAGE BELOW.
***ALSO JUST RELEASED: A Stunning Ray Of Hope For Battered Longs In The Gold Market CLICK HERE.
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