Would You Recognize a Slow Motion Collapse If One Was Right In Front of You?

Mon, May 16, 2016 - 1:36pm

A Reserve Currency : Junk Currency Comparison.....

I reduced the full chart from it's full size (in today's RNP video) to about 30% to allow it to fit in here. The detail that matters most is still retained with adequate clarity.

It's the kind of analog which a computer, using for example Pearson's Ratio, would give a very low correlation. Looking at it by eye from experience I'd expect maybe not much more than a 15-25% correlation - eg Pearson's Correlation 0.25 score - if that. But when somebody familiar with market movement, and the character of market movement, particularly someone who knows the difference between impulsive and corrective price action, sees this for the first time they're more likely to say something like "How about that!".

In the green and red is the price of gold in Venezuelan Bolivars. In the shocking pink is the price of gold in US Dollars, which the leaders of society assure us is the strongest currency in the world. The World's Reserve Currency. Timescale is intentionally different between the two. One chart is monthly and the other quarterly, which is one bar of one for every three (months) of the other. If the loose correlation continues, the USD will (continue to) decline at 1/3rd the speed of the unfortunate Venezuelan currency.

The vertical price scale in both is logarithmic, or on a percentage scale. Therefore because normalization has been done, comparisons can be made with reference to either of the numbered price scales shown.

The unfolding Venezuelan economic disaster is considered a full on collapse, complete with food riots, street protests and so on. By looking at the gold chart we can see the US economy has been doing much the same at 1/3rd the speed, but USD is considered to the "the best house in a bad neighbourhood" or "the least bad nag in the stable" to use phrases oft repeated in current times.

But if USD continues to do the same as VEF - it's just a slower collapse. What a difference there is in sentiment between these two! How little real difference there is remains to be seen, as the coming three years to the next pivotal moment unfold.

argentus maximus


The author posts daily commentary on the gold and silver markets in the TFMR forum: The Setup For The Big Trade. More of the author's work (mostly video) can be found here: RhythmNPrice.

About the Author


cliff 567 · May 16, 2016 - 1:43pm


After reading, thanks am

· May 16, 2016 - 1:44pm

Excellent, AM!

Thank you!

Ferd Torgerson · May 16, 2016 - 2:18pm
procog · May 16, 2016 - 4:45pm

Thurd works for me.

Great thanks for your post.

Mr. Fix · May 16, 2016 - 4:52pm

At first it's slow-motion, then they pull the rug out ....

Yep, it's a collapse in progress....

(4th, KEEP STACKING!) wink

AlienEyes · May 16, 2016 - 6:19pm

Excellent Chart and post, AM.

The greatest difference between the Venezuelan chart and a US chart of the same subject is the length (magnitude) of the vertical lines. Venezuela is much further along their financial "Highway to Hell" than we are. Not to worry if you are a simple minded socialist. Two out of three of our presidential candidates are socialist and the third is a moderate at best so the odds are, American will soon use all of its vast power to catch up with Cuba, Venezuela and Zimbabwe.

The American citizens that are not insane are left with a perplexing problem. If the banksters, their sell-out politicians in congress and their mindless supporters ("useful idiots") are put against a wall, which group of scum gets capped first? The treasonous rats had better pray that I'm not on the firing squad because while everybody else is aiming for center mass, I'll be aiming for their nuts and guts....and like Bond, "I never miss".


pm_newbie · May 16, 2016 - 11:17pm

fantastic post

thanks AM!

Owtovit · May 17, 2016 - 3:56pm


been a while since you have posted on Main Street...But as usual you keep the best for last...fanfuckentastic me old chinwowser, look forward to "hearing" from you soon

edit: excuse my dumbassedry.....but who is Pearson?

· May 17, 2016 - 4:40pm

Pearson's Ratio is a

Pearson's Ratio is a calculation equation to compare two lines to see how well they compare with each other. So it gets used as a correlation % measurement in statistics. I use it to measure accuracy or good fit with price charts to see if I am on the right track.

Here is a link that gives the technical gist: https://learntech.uwe.ac.uk/da/Default.aspx?pageid=1442

· May 17, 2016 - 10:28pm

Thank you, AM

You have such a unique way of seeing truths and relationships, and a way of making them visible to the rest of us. You also have a knack for expressing those truths in a way that eschews the doomer style that undercuts many of our similarly directed efforts- yours are all the more powerful because of it. Thanks for posting.

Notice: If you do not see your new comment immediately, do not be alarmed. We are currently refreshing new comments approximately every 2 minutes to better manage performance while working on other issues. Thank you for your patience.

Become a gold member and subscribe to Turd's Vault


Donate  Shop

Get Your Subscriber Benefits

Exclusive discount for silver purchases, and a private iTunes feed for TF Metals Report podcasts!

Key Economic Events week of 12/10

12/11 8:30 ET Producer Price Index
12/12 8:30 ET Consumer Price Index
12/13 8:30 ET Import Price Index
12/14 8:30 ET Retail Sales
12/14 9:15 ET Industrial Prod. and Cap. Utilization
12/14 10:00 ET Business Inventories

Key Economic Events week of 11/26

11/27 9:00 ET Case-Schiller home prices
11/27 10:00 ET Consumer Confidence
11/28 8:30 ET Q3 GDP 2nd guess
11/28 10:00 ET New home sales
11/29 8:30 ET Personal Income and Spending
11/29 10:00 ET Pending home sales
11/29 2:00 ET November FOMC minutes

Key Economic Events week of 11/19

11/20 8:30 ET Housing Starts
11/21 8:30 ET Durable Goods
11/21 10:00 ET UMich Sentiment
11/21 10:00 ET LEIII
11/21 10:00 ET Existing Home Sales