In terms of the metal underlying these companies, it is just as bad now as it was in 2008.
But many things are different now than in 2008, most in favor of the gold stocks.
For one, the overall U.S. stock market had collapsed right along with the gold stocks in 2008.
Today, as you can see, that is definitely not the case with the Dow at new nominal highs.
Even more importantly, as you can see in the following chart, the true money supply growth in the U.S. had almost reached 0% in 2006, which led to the 2008 collapse.
Since then the money supply growth in the U.S. has been above 10% per annum for a record period of time. In short, nominal collapses don’t happen when the money supply, prodded by Ben Bernanke and his most dovish speech of all time last week, is being goosed at these levels.
In the opinion of TDV, the reason the Dow is at record nominal levels is because most market participants have been fooled into believing that this fake money supply growth is real growth. In time, they will realize they’ve yet again been fooled by monetary inflation. When that happens, many of them will also realize what is really going on and gold will surge well over $2,000/oz. And, when that happens, many will be looking for ways to get “in” on the gold market and after seeing gold rise 50% in a short period of time they will look at other ways to play the gold market.
That’s when they will again look to the gold stocks and we will see a bubble for the record books.
This is truly a gift for those not already invested or not fully invested in the gold stocks. It will be a ride for the ages… all it takes is the cajones to pull the trigger. As someone who has been involved in these markets for the last 20 years, I am literally pounding the table for you to get in now.
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