Gold makes half-hearted attempt to break its deep winter funk

(USAGOLD – 2/22/2021) – Gold is making a half-hearted attempt to break its deep winter funk this morning as the dollar, the bond market, and stocks all showed signs of stress. It is up $14 at $1800. Silver is up 21¢ at $27.58. This morning, in concert with our Chart of the Day, we thought it might be worthwhile to revisit famed Wall Streeter Jeremy Grantham’s recent forecast in which he warned his clients that the “long, long bull market since 2009 has finally matured into a fully-fledged epic bubble. Featuring extreme overvaluation, explosive price increases, frenzied issuance, and hysterically speculative investor behavior, I believe this event will be recorded as one of the great bubbles of financial history, right along with the South Sea bubble, 1929, and 2000.… Make no mistake – for the majority of investors today, this could very well be the most important event of your investing lives.”

Chart of the Day

annotated chart mapping the Buffett indicator now at most overvalued in history

Chart courtesy of VisualCapitalist.com • • • Click to enlarge

Chart note: “In 2001,” writes Visual Capitalist in the notes accompanying this chart, “Warren Buffett famously described the stock market capitalization-to-GDP ratio as ‘the best single measure of where valuations stand at any given moment.’ This ratio, now commonly known as the Buffett Indicator, compares the size of the stock market to that of the economy. A high ratio indicates an overvalued market—and as of February 11, 2021, the ratio has reached all-time highs, indicating that the U.S. stock market is currently strongly overvalued.” Other instances of extreme valuation, as you can see, were followed by extended periods of stock market decline.

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