Gold Is Not In A Bubble: Gold Bull Market In 10 Charts

In an excellent collection of 50 charts, Ronald Stoeferle from Incrementum Liechtsenstein and writer of the In Gold We Trust reports presents all fundamental data related to gold’s bull market and the debt bubble. The charts cover the gold bull market, the economic debt crisis, and the worldwide debasement of currencies.

This article highlights ten charts. They answer the question if the gold bull market has ended and if gold has been in a bubble. The short answer is “no”, the long answer is provided by means of the charts below.

Debt crisis – fundamental driver of gold’s bull market

The debt crisis is far from over. The nominal amounts point to  a bubble that keeps on growing. The most concerning fact is the diminishing rate of return of a marginal unit of debt: more debt is needed for less economic growth.

credit_market_debt_vs_gdp_vs_monetary_base_1971_2013

credit_debt_per_capita_2012

central_bank_balance_sheets_vs_gold_price_2002_2013

Currency war

The ongoing currency war which started in 2010 (according to Jim Rickards) is expected to last till 2020 or later. Gold is not going up but a currency loses value in comparison to gold. The next chart shows the past performance of currencies. The next charts show the ongoing trend which should accelerate going forward.
currency_basket_losing_value_2000_2013

Gold’s bear in its secular bull market

Gold is experiencing a mid-cycle correction. The first chart shows the similarity with the correction of the 70’s. The second chart reveals that gold has not been in a bubble.
gold_price_mid_cycle_correction_1970's_1974_1976

Gold during deflationary periods

Gold’s current reaction is a result of disinflation, i.e. a period in which inflation is still present but declining. Most likely, we will enter either deflation or inflation. In either case, gold will be the ultimate store of value. That is undoubtedly a surprise to many disbelievers. We have explained in more detail how Rationale For Owning Gold In The Coming Deflationary Bust.
gold_silver_commodites_during_deflation

Gold is money

There is a good reason why gold is money. That reason is quite underexposed. It’s related to the huge stock-to-flow ratio.
gold_stock_to_flow_ratio
The full presentation is a must-read.