Gold price SILVER Bullion and Gold Price SHOULD Be Higher (Here's Why…)
If you take a look at the price tag of where both are right now and where they should be, the s p 500 is no bueno right now. Gold, on the other hand, couldn’t be any more undervalued. Why well find out shortly, but first, if you’re new to this channel, please hit that big red subscribe button right down below. Also please hit the like button, helps to get this economic evangelism right on out there to the masses to bring more people into precious metals. Now big shout out to omnipotent being he’s a viewer, and he reminded me of this website that you’re looking at right here called the usdclock.org, definitely check it out, there’s a lot of fun data on there to go through, but i wanted to specifically, you know, talk About gold’s price tag, and we can also take a look at silver’s as well and uh bring it into perspective. So, as you guys can see here, on the right hand, side, the dollar to gold ratio should be 32, 000 and 626 cents. Now, if you took a look at this, you’re, probably like how is that even possible? Well, uh, if you, if this isn’t, this didn’t just arrive out of thin air uh, they calculated this by basically taking the year over year, increase in the u.
s m2 money supply and then dividing that by the yearly world production of gold in ounces, so that’s how They arrived at this 32 thousand dollar number.
Now the crazy thing is that’s about 17 times about 17.3 times. What the current gold price is right now, but you know what’s an even better, more undervalued asset silver silver should be three thousand nine hundred and thirty four dollars, and if you take that and divide it by the current price, um you’d get somewhere close to around A little bit over 170, so it’s about 170 times more, where we are right now, with the price of silver. So definitely the metals are extremely undervalued. When you take a look at how they arrived at these numbers. Using this metric now, let’s take a little bit of a deeper look into gold and see how and compare you know if the s p, 500 or gold is the better bet. So let’s take a look at this quick quote here from this new one from kid: co entitled, kikko or gold is a safer bet than chasing overvalued stocks, fx tm, so let’s start gold is a better option than chasing overvalued stocks rights, fx, tm chief mark uh, With yields expected to remain low for a long time, inflation projections likely to head higher in the months to come and geopolitical tensions on the rise. Some great ingredients are present for the precious metal to continue attracting inflows. Syed says gold is very close to its all time highs of 1920 an ounce and is looking ready for more gain, only 50 dollars away from the all time high.
It is only a matter of short time for the yellow metal to see a new record. Syed writes in the meantime, stocks are continuing to ignore deteriorating u.s china relations, so let’s get a breakdown of where we are with the schiller ratio and the smp 500, so um the average for or better yet before we actually get into the shiller one let’s let’s Let’S, take a let’s, take a look at the business today. Article here entitled market overvalued, consider schiller’s, cyclically adjusted pe, not regular uh pe to find out so let’s get into it and then i’ll get into. Why we’re taking a look at the shiller pe, so let’s start here a black swan event reads: exceptional outcomes, but when you analyze a trend, exceptions do not make for accurate conclusions. The roni’s induced economic slowdown is a big aberration of financial year 2020 to 2021.. Although the economy was already on a downturn before the roni’s ripped, the country, the expected blip in corporate earnings and gross domestic product in fy 21 and the rebound in fy 22 can only be studied in silos. In that case, how will the most popular valuation metric p e ratio uh that relies on 12 month trailing and forward earnings per share, depict correct market valuations? It cannot. This is why a lesser known valuation, metric cyclically adjusted p e ratio, also known as cape, that takes into account average earnings of last five to ten years, is what analysts are recommending to value stocks.
In the current scenario, this was introduced by nobel laureate robert robert schiller. Cape is also called schiller, p e ratio so that’s. Why? I mentioned the schiller? P e ratio, so let’s take a look at that relative to the s p. 500. So if you take a look down here, the mean the average s. P. 500 is 16.72. If you take a look at where we are right now, we’re almost double that we’re at 30.11 we’re, almost double that and uh earlier in the year we were even higher than where we were um, then, where we are today. This is right before the roni’s hit and that level is even higher than where things were on black tuesday and we’re about where we were, when black tuesday hit back in the back in the late 1920s and, of course, we’re way higher than where things were on Black monday, so we’re very uh overvalued right now, of course, we’re not where we were at the uh top of the dot com bubble, but we’re slowly approaching there um. You know we’re pretty much right behind our second in line to that record, so we’re getting really really close to that point. So, according to the shiller p e ratio for the s p 500, we are definitely in over valley territory. So again, there is no competition right now when it comes to gold and silver versus the s. P, 500, gold and silver are extremely undervalued, while the s p 500 continues to be overvalued.
But let me know what you guys think in the comment section below.