From this point (in early 2003) until 2011, gold soared from around $400 per ounce to almost $2,000 per ounce – a 400% increase in a huge asset class. From 2002 until 2012, gold moved higher each and every year. It’s easy for people to point backward on a chart and say, “See, this is what it meant.” But that’s not what’s happening here... We’re not just looking backward. My team of analysts and I have been following this barometer for decades, and we’ve used it – in real time – to make our best and most valuable financial decisions. This is extremely important . Now, take a closer look back at the previous chart... If you look closely, you’ll notice that the GFSB collapsed well past its “resistance” point at 2% in early 2008. It happened just before investment banks began failing and the entire
It was an extremely rare event. It’s related to the “inverted yield curve” that occurred last month, but it is an even rarer and more “acute” signal. And the GFSB, also referred to as the “real” 10-year yield, plays a significant role. For sophisticated investors, this upcoming monetary inversion will unlock trillions and trillions of dollars in additional liquidity. The chart below shows what I’m talking about... The descending (blue) line is the GFSB... arguably the single most important financial metric in the entire world. The ascending (black) line is the price of gold. As you can see, when the GFSB fell below the 2% mark (on the left scale), it heralded the beginnings of a true firestorm. One of the most important impacts of this massive economic change was the first real bull market in gold since the late 1970s.
By Porter Stansberry
GOLD VS. 10-YEAR 'REAL' YIELDS
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Gold
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'Global Financial System Barometer' This barometer shows why gold soared in 2010 and 2011... and why it's poised to soar again now.
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American Consequences
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