{"id":8081,"date":"2018-01-20T07:30:33","date_gmt":"2018-01-20T12:30:33","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=8081"},"modified":"2018-01-20T07:30:33","modified_gmt":"2018-01-20T12:30:33","slug":"the-coiled-spring-trade-to-make-this-year","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/the-coiled-spring-trade-to-make-this-year\/","title":{"rendered":"The \u201cCoiled Spring\u201d Trade to Make This Year"},"content":{"rendered":"

Editor’s note: <\/strong>Lately we’ve been pounding the table on gold<\/a> here in the Market Minute<\/em>. And for good reason… it’s just beginning what we think will be a massive bull run.<\/p>\n

But the commodities space is much more than just gold. It’s full of beaten-down assets that could all snap back this year.<\/p>\n

We want you to be able to take advantage of this once-in-a-lifetime trade. And Casey Research’s commodities specialist David Forest has all the details below…<\/p>\n

\n

The place looked like a nuclear blast zone.<\/p>\n

With ox carts.<\/p>\n

I was standing in a field in northern Myanmar, the Southeast Asian nation formerly known as Burma – a place I’d been investigating for mining opportunities. The 12-hour car ride up from the principal city, Yangon, was what I expected. We passed dilapidated villages, many of which were only then beginning to be connected to the national electric grid.<\/p>\n

I thought signs of civilization would dwindle as we got further into the countryside. But when we arrived at our destination, I was shocked at what I saw.<\/p>\n

Machine parts littered the ground: electric generators, jaw crushers, and sundry spare mechanicals. Firehoses crisscrossed through the mud, many half-decayed. There was turned-up earth as far as the eye could see. Some of the pits were hundreds of feet deep – making the area look like a bombed-out no man’s land from some unknown war.<\/p>\n

The eeriest part? Despite the massive scale of activity suggested by the debris, there wasn’t a single person in sight.<\/p>\n

Asking my guides what happened, I was told the area had been the site of a massive gold rush. But the miners had all gone now.<\/p>\n

“Let me guess,” I said. “They started in 2011 – probably around October?”<\/p>\n

The guides talked amongst themselves in Burmese. Then nodded.<\/p>\n

“And ended… 2013, August?”<\/p>\n

Once again, they nodded.<\/p>\n

“Some continued until September,” one old-timer finally confirmed. “Were you here then?”<\/p>\n

I told him I’d never seen the place before. But I didn’t need to see the local miners to know when they’d boom and bust.<\/p>\n

I just thought of the price of gold…<\/p>\n

You see, in January 2011, gold began a spectacular run – one that would take the metal from near $1,300 per ounce to as high as $1,900 by August. Leave a few months for miners to mobilize, buy equipment, and get land, and an October start made sense.<\/p>\n

Then in 2013, the story was opposite. After starting the year at $1,700, gold began a tumble that would take it below $1,200 by June.<\/p>\n

<\/p>\n

Local miners would have seen their profits evaporate nearly overnight as the gold price fell.<\/p>\n

Even the world’s biggest mining companies had trouble turning a profit in late 2013. The little guys would have been crushed, unable to cover their costs for labor, diesel, and equipment.<\/p>\n

I’d seen that same story play out from Colombia to Colorado to Cambodia. Prices go up, new mines open – prices drop, they close again.<\/p>\n

It happens surprisingly quickly. And it’s one of the most important lessons for investors.<\/p>\n

In fact, understanding this simple but powerful principle can make you an absolute fortune<\/u>.<\/p>\n

And it’s now more important than ever to understand what’s going on.<\/p>\n

That’s because we’re entering what I believe will be one of the biggest investment opportunities we’ve seen in the current millennium: a major up-cycle in commodities<\/strong>.<\/p>\n

My research shows that commodities as a group are about to enjoy a historic resurgence. The kind that has happened regularly and reliably throughout history, and which has made fortunes for early investors.<\/p>\n

Now, looking at commodities today, you might not believe we’re at a bottom.<\/p>\n

Most commodities right now are priced middle-of-the-road on a historical basis, if not a little on the high side.<\/p>\n

Supply and demand figures also don’t show much cause for alarm.<\/p>\n

But let me show you what set me and my colleagues into high speed…<\/p>\n

You see, this chart shows clearly that commodities are indeed at a cyclical super-low. The kind that historically precedes explosive upward market moves with great reliability.<\/p>\n

Take a look.<\/p>\n

<\/p>\n

Plotting commodities prices versus other assets like stocks, we can see that hard assets are at a cyclical low right now<\/em><\/p>\n

Here’s what you’re seeing in the chart above…<\/p>\n

The black line is commodities prices – but not in absolute terms. Rather, we plotted commodities (as represented by the GSCI Index) as a ratio <\/em>to stock prices of the S&P 500.<\/p>\n

Why is this a critical distinction? Because, as I showed above, absolute prices of commodities right now appear to be at very healthy levels.<\/p>\n

But when we look at commodities compared to everything else in the world<\/em>, they’re ridiculously cheap.<\/p>\n

Right now, the ratio of the commodities index to the S&P is below 1. The average of the same ratio since 1970 is 4.1 – meaning that commodities are more than 75% below the normal pricing that’s prevailed for the last 47 years.<\/p>\n

In fact, this is the lowest<\/em> the commodities-to-stocks ratio has ever been during this recorded period. Lower than the lows put in during the early 1970s or at the peak of the dot-com bubble in the late 1990s (both circled in green above).<\/p>\n

Both of those periods were followed by an explosive reversion to the mean. Between 1972-1975, commodities, as measured by the index, soared 250%. Between 1999-2007, the gains were even more spectacular, with commodities roaring 400%.<\/p>\n

And today, commodities are even cheaper – in relative terms – than before those two coiled-spring events.<\/p>\n

Game on.<\/p>\n

I should note, this thesis is not one you’ll hear in the mainstream press. If you listen to the pundits on CNBC, you’ll hear sentiments like I mentioned above – prices are normal, supply is fine, demand is steady. Nothing to see here.<\/p>\n

But my research shows they’re missing a crucial point: The trillions of new dollars created over the past decade have had a subtle but incredible impact on the commodities world.<\/p>\n

It’s a change that creates potentially fatal risks for those reliant on purchasing metals, energy, and foodstuffs… but also massive opportunities for astute investors who get positioned ahead of this building wave.<\/p>\n

Regards,<\/p>\n

<\/p>\n

David Forest
\n Editor, Casey’s Big Speculation<\/em><\/p>\n

P.S. <\/strong>The time to get involved in commodities isn’t when they’re front-page news… It’s now.<\/p>\n

This is the market we’ve all been waiting for… and Doug Casey and I are convinced we’re going to see incredible moves in commodities in the next few years.<\/p>\n

To learn how you can position yourself for this rare market phenomenon, check out our brand-new video presentation<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

These beaten-down markets are ready to snap back.<\/p>\n","protected":false},"author":31,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[34],"newsletter-type":[],"ticker":[],"class_list":["post-8081","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-david-forest"],"acf":[],"ai_tts_audio_outdated":false,"ai_tts_legacy_post":false,"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/8081","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/31"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=8081"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/8081\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=8081"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=8081"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=8081"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=8081"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=8081"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=8081"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=8081"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}