Chris Rutherglen: Is Q.E. Needed for the Next Silver & Mining Cycle Boom?

Tom welcomes back Chris Rutherglen to take a very deep dive into a few gold charts. Chris is a PhD Scientist/Engineer, Level 3 CFA, and Publisher of the Gold Investor Research Substack.

Chris explains how the long-term outlook for gold prices involves several key factors that influence its trajectory over time. One important aspect is the mid-cycle level of gold, which reflects the balance between the amount of gold available above ground and the overall money supply. When the money supply increases, this can raise the mid-cycle level, potentially leading to higher gold prices. Currently, gold is trading above this mid-cycle line, suggesting that a correction downward might be possible in the near term.

Chris shows his charts for the debt-to-money supply ratio. Historically, this ratio has remained relatively stable at around 2.5% from the 1920s up until the late 1970s. However, after the financial crisis of 2008, it began to rise and has been declining since then. If this downward trend continues, it could drive gold prices higher as more money would be needed to support existing debt levels.

Looking at long-term historical patterns, there is a suggestion that gold might reach a high point around $8,000 to $10,000 in the early 2030s. This projection is influenced by ongoing monetary expansion and economic conditions that favor safe-haven assets like gold.

Despite these indicators Chris, expects predicting the future of gold prices with certainty is challenging due to a variety of factors, including inflation rates, global political and economic events, and policies set by central banks such as the Federal Reserve. Key elements to watch include quantitative easing measures and the levels of government debt, both of which play significant roles in shaping the growth of the money supply and their impact on gold demand.

Time Stamp References:
0:00 - Introduction
1:04 - Timeframes & Cycle Lengths
7:52 - Long End Curve?
11:58 - Levels and Zones
21:00 - Gold Mid-Cycles Levels
24:04 - Cycles & Calendar Periods
30:15 - Probabilities & Targets
32:35 - Gold & Equities Pullback
33:42 - S&P GDP Ratio + CPI
37:03 - Gold & Inflation
42:35 - Gold Silver Ratio
44:46 - Silver Price Outlook
46:55 - Silver Timing & QE's
51:16 - HUI Miners Vs. Gold
54:15 - Major Miner Charts
1:00:43 - Patience & Majors Costs
1:07:30 - Long-Term Gold Timeline
1:10:42 - All Sector Debt/US M2
1:18:12 - Wrap Up

Talking Points From This Episode
- Gold is currently trading above its mid-cycle level, suggesting a potential near-term downward correction due to the balance between gold supply and money growth.
- A declining debt-to-money ratio since 2008 could drive higher gold prices as more money may be needed to support existing debt levels.
- Gold is likely to reach $8,000 to $10,000 by the early 2030s, driven by monetary expansion and safe-haven demand in favorable economic conditions.

Guest Links:
Twitter: https://twitter.com/CRutherglen
Substack: https://giresearch.substack.com

Chris Rutherglen is a private investor whose primary occupation is in science & engineering with a focus on novel semiconductor devices for microwave and mm-wave applications. He began investing in the precious metal space in 2003 and has done well following a value-oriented investment approach. Although he has never been employed in the finance/investment field professionally, he did complete level 3 of the Chartered Financial Analyst (CFA) program in 2011. Chris has a BS in physics from the California Institute of Technology and a Ph.D. in Electrical Computer Engineering from the University of California, Irvin