Well, unfortunately sometimes the devil is in the details.  We will always be able to couch opinions in specific environments to make points that may not be valid.  This is exactly why the only pricing mechanism for the US Dollar is set up as a complicated basket of ratio charts.  The “price” of the Dollar using that format often has absolutely no relationship to the direction OR the movement of the value of the Dollars- an example of which is the late 70’s.

Thus, first the XAU is a laggard PM stock index at best.  Anybody who choses to invest in laggards, especially in terms of trading, is giving himself a very tough row to hoe.  Let’s look at the chart of the HUI versus $Gold over 20 years.  If one is going to do anything in a buy and hold style, then no ratio charts make any sense as reference points.  If one is going to trade on any time component including an intermediate-term time-frame, then he MUST be able to do some basic work in terms of “timing.”

Looking at the HUI:$Gold chart shows us that once the bottom was in place (2000), the HUI outperformed Gold by about 5X into the late 2003 top.  If one was trading the HUI on the swings and moving money into phys Gold, then one may well have been able to increase the amount of phys Gold he now owns by 5……….or 7……………..or 10…………or 20………or more times.  Look at your stack of Gold.  Now, imagine 20 x more sitting in Wanka’s account…………..and who’s stack would you really like to have?

The same can be said for a 2X level or greater since late 2008.  For the time between, a good trader still could have done well, though not nearly as well as in the 2000 to 2003 period.

Going one step further, since the chart of both Gold and of the PM stocks as seen in the HUI have traded almost perfectly step-for-step (meaning that the same ratio in the late 70’s had to be almost the exact same as today) in today’s market as the late 1970’s- if one had that fractal path to rely upon to date, one could have done much, much better than the above estimations…………….in my estimation.  Will that continue to be true into the future?  I think so.

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