Lowest 10 yr yield ever

... in gold.

Pretty amazing that about 10 years ago, you could get a 1/4-oz gold coin every year for lending the government $1000. It's at less than 1/50th of an ounce now (see vertical axis).

Note that the ratio has hit the 10% exponential moving average envelope. So, look for a significant rise in yields and/or drop in gold in the next few days.

While we're at it, let's look at the gold to DXY ratio from a few months ago. The trend line I had drawn then held wonderfully (as it did in silver), and now we see that gold vs. the foreign-currency purchasing power of the dollar has hit an all time high as well. Note the RSI over 70, which suggests either an impending drop in gold and/or dollar rally.


Robert LeRoy Parker said...

I think Bob Moriarty has lost it.

His latest

Guy has gone from being total hyperinflationist to outright deflationist. That's the opposite of what I usually see.

GM Jenkins said...

Thanks for linking to that RLP. Moriarty says with supreme confidence that the top for silver is in - the secular bull is over. What's his argument?
1) Only someone who enters a secular bull at the bottom is an investor. Now it's pure speculation. Such that someone who invested in the NASDAQ composite in 1975 would be an investor. Who, after making 450% in 10 years, would wisely sell his position, not wanting to be a speculator. Of course, he'd be leaving 1500% on the table for the stupid speculators. In other words, Moriarty sounds like an idiot. A true investor doesn't care about the past except insofar as it provides clues about why markets have moved the way they have been moving. NASDAQ fundamentals didn't change in 1985, and neither has gold's now. (Yeah, he called a top in silver, but hard to see gold going up much further if silver is on it's way down. He should've gone whole hog and called for an end in gold too.)
2) His other argument: “In 160 years of trading, there has never been a correction in silver as severe as the 34% decline we experienced in to the May 17 low. Declines of this magnitude have always been an indication a final bull market top in place.”

Again, more magical thinking. No mention of the margin hikes that without a doubt increased the precipitousness of the decline. And the precipitousness is what he's talking about, because silver has fallen more than 37% in this bull market. It fell from 21 to 8 bucks just 3 years ago. It fell 30-40% two other times before within the span of months. Anyway, who cares? Why has it gone up since 2001, and have the forces driving it up since then changed?

Also, remember, this guy called for an intermediate top around $36 earlier this year, and was embarrassed as it moved up another 40% over the next 6-8 weeks. Now it's back over $36 again and looks to have support, so I think he is "doubling down" in some sense.

Robert LeRoy Parker said...

This statment made me think he is off his rocker.

"But gold and silver are not wealth. Wealth is some productive asset that provides a real after tax return."

Not according to merriam webster:


Originated from old english wele or weal, which means well-being, prosperity, or happiness. Modern definitions include:

2. abundance of valuable material possessions or resources

3. abundant supply : profusion

a : all property that has a money value or an exchangeable value
b : all material objects that have economic utility; especially : the stock of useful goods having economic value in existence at any one time

I am in agreement that he is an idiot.