Doing very well if, or when, it all comes down
I just read this in an article on goldseek.com.
G&R presents a chart showing over the last 130 years, there have been four times when commodities became very undervalued compared to the stock market, measured by the Dow Jones Industrial Average.
image-20230703082605-6Source: Goehring & Rozencwajg Associates
These four periods, corresponding to the lowest points on the green line, were 1929, the late 1960s, the late 1990s, and today. The key message is that after each stint of undervaluation, commodities entered large bull markets, before becoming overvalued.
Investors who were smart (and brave) enough to invest during undervalued periods saw huge gains, even in the 1930s. For example, investing in a natural resource portfolio (25% metals and mining, 25% precious metals, 25% agriculture, 25% energy) in 1929 would have returned 122% by 1940, clobbering the stock market, which fell 50% during this time.
Rozencwajg notes that every time there has been a major change in the monetary system, it corresponds to a low point in the charts of commodity prices relative to financial assets.
“So here we have another bottom, the cheapest price commodities have ever been relative to financial assets, and we’ve been saying since 2018 there’s going to be a change in the global monetary system and so I think that we’re starting to see that now.”
Such a change has already happened three times in the past century: in 1929, the end of the classical gold exchange standard; in 1971, when President Nixon took the United States off the gold standard; and in 1999, during the Asian currency crisis when several countries in
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