Things to Come in the Current World Financial Climate
GoldSilver (w/ Mike Maloney) FEB 6, 2018
Cryptos, Stocks, Gold & Silver: Things to Come in 2018 – Mike Maloney
Join Mike Maloney for his latest report on what he expects to happen for investors in 2018 and the coming years. Bitcoin, stocks, gold and silver are all covered in this in-depth look at today's financial climate. Strap in, because this is not going to be pretty — unless you are a precious metal or crypto investor.
Here are a few of the highlights:
U.S. equity volatility is at a dangerous low. The CBOE Volatility Index (VIX) closed below 10 a total of 54 days between 1998 and 2017. But 46 of those days were between May and December of 2017! In other words, investors are the most complacent and passive they’ve been in recent memory. This could be a warning sign that U.S. equity markets are near a tipping point.
The adjusted price-to-earnings (PE) ratio is one of the highest in market history — meaning stocks are highly overvalued. This ratio ended 2017 at 32.44, while a “fair value range” would be 12-15. This PE ratio is roughly equal to where it was in 1929 before the Great Depression hit. The only time it has been higher was in 2000 before the dot-com bubble burst.
This low-volatility regime is unlike any other. There have been 14 previous low-volatility regimes since 1928. In each case, ending them required a major shock to the economy, such as a war or recession. But this time around, QE leverage and passive strategies mean volatility has been suppressed longer than previous regimes, meaning an even bigger correction might be coming.
This period is actually a great time to invest in gold and silver. Remember, precious metals have an inverse relationship with U.S. equities. When the leverage bubble bursts, gold and silver will be stable money in a time of great instability.