Christopher Aaron: Important Turning Point in the Metals
Tom welcomes back to the show, Christopher Aaron.
Christopher explains why it’s important to understand what is going on with precious metals and inflation over the past eight months. Any time there has been news supportive of the economy we have seen the opposite reaction by markets. Reports of high inflation have resulted in metal sell-offs and the dollar moving higher. This is backward from what one might expect. The market seems to be pricing in future responses from the Fed. We’re coming to a turning point where the psychology of markets shifts.
The problem today is not the CPI but the debasement of the currency. Most of the measures taken by central banks are magnifying inflation.
Sentiment in the metals sector has been quite terrible for the last year. That may be shifting just in the last few days. He recommends looking for companies that have great exploration potential but be sure to not overpay. Look for companies that are just rounding off the bottom.
He gives us an overview of the GDX and how it’s influenced by investor psychology. GDX companies are heavily leveraged to the price of the metal and there are signs of capitulation. This appears to be a possible entry point for the market.
Christopher examines the long-term gold to DOW ratio. Eventually, we will see a reversion to the one-to-one ratio. We are bumping up against a historical chart trend and it’s possible that gold will begin to outperform the general equities. Investors will want to watch this carefully.
The decade-long rising trend for the dollar has broken but has not started a declining phase so far. The dollar is failing multiple attempts to rally. Eventually, it will break to the downside. This is likely the driving force behind numerous commodities that are heating up.
Lastly, Chris highlights the need for real education in understanding fiat systems because there is an enormous wealth transfer to the rich. The wealthy are directly benefitting from inflation.
Now is the time to prepare your lifeboat because there is trouble coming for the dollar.
Time Stamp References:
0:00 – Introduction
0:37 – Inflation & Metals
5:18 – Analyzing Inflation
8:56 – Metrics & Noise
10:50 – Psychology & Sentiment
16:00 – GDX Chart
22:23 – Long-Term Charts
23:40 – Dow Gold Ratio
33:26 – US Dollar Chart
41:42 – Elite Private Placements
48:48 – Anti-Fiat Education
56:49 – Wrap Up
Talking Points From This Episode
- Metals market overview and inflation expectations.
- Outlook for the dollar and commodities.
- Investor psychology, sentiment, and capitulation.
- Need for additional education in fiat money systems.
Christopher Aaron is Senior Editor for the precious metals investment portal Gold Eagle.
A former counter-terrorism officer for the CIA and Department of Defense, Christopher has always had an independent analytical outlook. He volunteered to serve two tours to Iraq and Afghanistan from 2006 – 2009, conducting pattern analysis and mapping for the US Intelligence Community in Washington, DC. Drawing upon his investigative background, he turned attention to the financial markets in the early 2000s.
Mapping shares similarities with technical analysis of the financial markets because both involve the observation and interpretation of patterns found in human nature. Through his work, Christopher shares with clients how these patterns are cyclical and embedded. Recognizing these patterns can be used to profit.
Christopher Aaron holds a degree in history and business, with advanced Department of Defense training in intelligence analysis.