Market Oracle: Silver Setting Up 70s Style Rally in the Midst of Financial Collapse?

Article by Hubert Moolman in Market Oracle

We are currently at an important point of the economic cycle. The end or peak of debt-based assets, and the significant appreciation of real assets like gold and silver.

An example of the last time we were in a similar position is the late 70s. The Dow was at or near peak levels after a multi-decade bull market, while gold and silver was in the midst (or end) of a consolidation (or correction).

The Dow could only start a new bull market after gold and silver had huge blow-off tops.

The Dow/Gold ratio peaked in January of 1966, before the start of the precious metals bull market. In a similar manner the Dow/Gold ratio peaked in August 1999, before the start of the silver and gold bull market.

Some time before the first important peak of the silver price in February 1974, the Dow again made a significant peak (in January 1973). This is very similar to the October 2007 peak of the Dow, which came before the April 2011 peak in silver.

So, if the Dow top is actually in, we could be in the midst of a multi-year silver rally like the one from 1976 to 1980.

However, this time the structure of the current financial structure is likely too weak to continue in its current form, and the problems (or debt) is far too big.

It will collapse eventually. The only question is: how far into the current silver rally will it be able to survive?

To read this fascenating article in Market Oracle and see the related charts, click here.