Memorial Archives

A Long-term Chart of the Gold/Euro Ratio
posted Feb 18, 2005 at 09:27PM

A chart to keep track of. A break above decade's old resistance is hugely bullish. An event like an American land war in Asia Minor, would confirm that the US books have no chance of even cosmetic recovery. Indeed a land war in Syria or Iran has so many potential ripple effects that it would take pages to describe them all. What would have seemed fantastical five years ago is, in my opinion, now within the realm of possiblity.

Oil boycotts from OPEC, overthrow of Saudi government, Iraqi Shiites going to war with thier US "allies"/occupiers; even a pre-emptive nuclear missile attack from North Korea, are now events that are not just the province of doom-saying paranoids anymore.

If, on the other hand, the support line breaks down, then we are probably looking at reviving the deflation scare scenario once again. So far the Asian indexes are not signalling anything and I believe if global deflation is coming that is where it will show up first.

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