BANKERS STOP THE PANIC – DIG IN FOR RANGE-BOUND PLAY

People sometimes ask why I’m so interested in gold? I am not a gold dealer, mining executive or financial advisor and I’m not even trying to make money by selling a subscription newsletter. The answer is that I believe the world needs to return to the gold standard for a number of reasons too numerous to cite here. Also, from a legal standpoint, gold is the most obvious example of a corrupted market and that is inherently interesting to me.

Most rational people now know that gold is heavily manipulated but no one ever does anything about it. Unlike manipulators in stocks, bonds and most commodities, gold and silver manipulators no longer try hard to hide. Their activities are blatant, open and obvious. That makes the metal an excellent example of what’s wrong with markets in general.

It is, perhaps, not entirely fair of me to say that “no one ever does anything about it.” For example, there has been some effort to clean up peripheral aspects like the so-called “London Fix”. As inherently corrupt as its name implies, the “Fix” is the smallest part of the swamp. Ninety nine percent of manipulation is carried out via collusive trading on futures markets. Nothing has been done about that. So-called “regulators” actually enhanced the price-setting role of futures markets by  “reforming” the Fix!

One could go on and on about the inadequate response to corrupted markets. Careful analysis and understanding is a first step toward pushing for real reform. I reported, for example, a few weeks ago, in a prior article, that bullion banks were in full-blown panic mode. They were frantically closing massive numbers of legacy short positions, covering them into a series of convenient “flash crashes.” The sudden crashes happened for no apparent reason, but shell-shocked market participants, allowing positions to be closed “on the cheap.” I predicted that prices were about to rise significantly and they did. 

I won’t quadruple the size of this article for the purpose of discussing the gold swaps, or how stocks, bonds, commodities and gold prices can be easily catalyzed up and down. To gain an understanding of the process, I suggest you read the prior article (and other previous articles) as well as the novel, “The Synod” (eBook) (paperback). Suffice it to say that a careful look at this week’s CFTC Commitments of Traders Report shows that the situation has now reversed itself. Various speculators have dramatically changed their positioning, yet again, and so have the banks, as compared with the last three weeks. Why?  What does it mean?

At the close of business on Tuesday, July 25th (when the Commitments of Traders Report data is compiled), the so-called “managed money” (a/k/a the hedge funds that are not closely connected with a major bank) returned to betting that gold prices will rise (a/k/a “going long”) and began closing short positions in both gold and silver. So-called “commercials” (a/k/a bullion bankers and their controlled fund entities) were taking on new short positions. There are two possibilities as to why this is now happening.

First, whatever event might have been panicking the bankers could be resolved at least in the short run. That is not very likely because if they could easily control that situation, they wouldn’t have been panicking in the first place. The second possibility, which I consider to be much more likely, is that the banks simply opened a large number of highly transient short positions for the sole purpose of temporarily holding down gold prices during the crucial options’ expiration week (last week). Sharply higher prices would have resulted in massive losses on call options that they’ve written. If too many calls ended “in the money” the banks would have to pay out a lot of money.

Let’s assume they took on the new short positions to avoid huge losses on call options. Since they must eventually jettison them, doesn’t that mean prices must go up dramatically, very soon? No, it doesn’t. Not in the short run. So long as we have clueless fools, in the form of “managed money hedge funds”, using extreme leverage in the hope of getting rich quick, everything can be managed. A day or two of deep price declines, catalyzed by means of attacking over-leveraged long speculators, will do the trick. If done right, stop-loss orders will be triggered, prices will decline, margin call based forced selling will occur, prices will decline more, and finally panic will allowing shedding short positions cheaply.

The long run is a different story. The type of price decline catalysis that the manipulators engage in cannot be sustained over very long periods of time. Such tactics do depress prices in the long term, of course, by convincing ultra-conservative investors to stay away from the artificial volatility of gold, but that is already baked into the cake. There are still enough physical gold buyers, and the demand is still so much higher than the supply, that prices will rise slowly over a period of months, in spite of the short, but sharp “crashes” that are likely in early to mid-August.

Still, it is currently impossible to determine the exact motivation behind the change in positioning. I would advise caution because the manipulators seem to be doubling down on their game. It is likely that they will continue to engage in highly coordinated actions. The current coordinated strategy appears designed to keep gold prices inside a $50 to $100 trading range for a while. They’ll be able to make a considerable amount of money trading the ups and downs within that range. How long the range can be maintained will depend on whether and when large physical buyers raise their bids in order to get the metal they want.

The situation in silver and gold are very similar. The bullion bankers have reopened a lot of short positions in both metals. Conversely, clueless hedge funds have reopened a lot of long positions. Oddly, and there is no obvious explanation, the hedge funds have not opened enough long positions in platinum to offset the new shorts opened by the banks. The only explanation I can think of is that some of the new platinum shorts represent bullion bankers trading with each other. That implies wash trading designed to control prices.

Wash trading consists of trades between two or more closely coordinating entities, designed to create the false appearance of price movement or stability. It is designed to influence others to accept fake prices as real. If that is what is happening, it implies a continuing sense of desperation on the part of the manipulators. They usually stay within the letter of the law even while violating its spirit. Wash trading is overtly illegal and that is why so much effort is put into the more expensive process of catalyzing price movement by targeting stop-loss orders. Still, with the traders nominally employed by different entities, proving wash trading is very difficult.

To prosecute, you would first have to prove that there is a cartel that coordinates trading in order to influence prices. But, remember, the same cartel that trades platinum is also trading gold, a government sponsored activity. Second, even if you managed to prove collusion, you’d also have to prove the trades have no legitimate purpose. Meeting this dual burden is extraordinarily difficult. It is made even harder because such a prosecution would necessarily disclose the scheme behind controlling gold prices. A number of government officials would be implicated in that, and the scheme to control gold prices would collapse. The government officials are, for the most part, acting within the letter of the law. The US Gold Reserve Act allows them to issue gold swaps to help manipulate the gold market. However, disclosure would mean political and/or career suicide.

Regardless of what the banks and hedge funds are doing in the short term, it is still clear that US government-owned gold, and specifically gold swaps, are the key to the continuance of the current scheme of price manipulation. Without that gold flowing into the world market, there would be widespread shortages and defaults in delivery. When the “gold supplier of last resort” finally pulls the plug, the game will be over, at least until prices rise above supply and demand equilibrium. I estimate that equilibrium exists at somewhere between $1,500 – $1,600 per ounce right now.

If and when prices rise above equilibrium, it will be more profitable to manipulate prices upward rather than downward, assuming most legacy short positions have been closed. Until the huge legacy short positioning is reduced much further, however, you can expect periodic flash crashes and intense efforts at price control. In short, on the surface of things, the manipulators seem to be in control again. Except for what looks like a need to use wash trading to suppress platinum prices in line with the other precious metals complex, they look rather confident again.

I believe that gold prices will be managed within a range of $1,200 and $1,300 per troy ounce for at least a few weeks. The key players will rid themselves of the current increase in transient short positions, and continue the process of unloading legacy short positions. Because all three major precious metals are tied to each other through cross-trading, their prices will move along with the price of gold. Prices will be slowly pressured upward in spite of the fact that we should expect more transient downward hammering episodes.

I suspect some readers will object to this analysis. They will ask about the recent reports that suggest China’s demand for gold bars is up by 50%? Shouldn’t that propel gold to the moon over the next few weeks?  The answer is “no”. For one thing, the reports are fundamentally wrong. They are based on an assumption that China’s gold demand was in the 1,000 ton range in 2016, when the real demand was closer to 2,000 tons. And, the demand for gold bars, in particular, is just one element of overall demand. More importantly, however, real world supply and demand has very little effect on highly manipulated markets in the short run. It will profoundly affect long term prices, but not the prices that will be created over the next few weeks to months.

Frankly, I would be very surprised if we didn’t see a few flash crashes and similar “shock & awe” hammer-down events in early to mid-August. Bankers will want to unload the new shorts, and they are also going to want to get back into the important business of reducing their long term liability exposure to legacy short positioning in the form of futures, forwards and so-called “non-allocated storage”. The easiest way to accomplish their goals right now, with maximum profitability and the lowest losses, is to catalyze shock & awe declines to shell-shock the market. Excellent buying opportunities, therefore, may be in store for August for those who are smart enough to see through the facade. But, you’d better act on them the moment you see them, because they will fade away very quickly.

_________________________________________________________________

Buy Synod“It moves fast, kind of like Robert Ludlum’s “Jason Bourne” trilogy…”

–  Josh Pullman –

THIS IS THE NOVEL THE INTERNATIONAL BANKSTERS DON’T WANT YOU TO READ!

CLICK HERE TO BUY THE PAPERBACK

CLICK HERE TO BUY AMAZON’S KINDLE EDITION

ALSO AVAILABLE AT APPLE iBOOKKOBOBARNES & NOBLE AND OTHER FINE BOOKSELLERS

The Synod is a conspiracy of 8 large international banks who seek to control gold, stock, bond and commodity markets all over the world. Jack Severs runs for his life when he learns too much, as the most sophisticated surveillance system ever built is deployed to track him down. As the ever-tightening noose closes, he struggles to uncover evidence to save himself and his world from collapsing! An exciting, fictional, fun and educational thriller about the banking cartel. Learn about the methods used to manage the price of gold and every other market on the planet, and how this affects business, politics and daily life in both the fictional and real worlds.

A GREAT GIFT!

COMEX PHYSICAL GOLD DELIVERIES RISE 729% YEAR OVER YEAR!

Written by:  Avery B. Goodman  (01/29/2017)

The price of gold has been generally following the predictions I made on December 9, 2016.  So far, so good…

A lot of non-connected hedge funds and other speculators are now heavily short gold. That includes many people who are writing negative comments about the metal, and paying others to write negatively.  They have been drawn in by entities who know better, and who are heavily connected to the US Treasury, Federal Reserve, Bank of England, ECB, etc. The latter have likely closed most of their unhedged short positions even as the speculators have increased theirs.

The well-connected have known the gold jig is up for a very long time. They have engaged in what appears to be an attempt at a very organized and deliberate position change. A number of big banks, such as J.P. Morgan, HSBC, Goldman Sachs and others, for example, made huge purchases of gold bullion banker’s bars. They still have big problems from their past activities, but not so much on futures and forwards markets. The remaining problem comes in the form of a huge uncovered “short” position via massive tonnages of  gold inside London-based “unallocated storage” schemes.  It is possible that the unveiling of the new so-called COMEX “spot” silver and gold contract, as well as the huge physical gold purchases by big banks has been designed to shift this remaining risk.

The temporary downturn in gold prices, last week, is meaningless. It seems quite clearly to have been orchestrated by a few big options sellers. These smarmy folks always use automated trading software, around options expiration week, to trigger stop-loss orders and margin calls. It is done to temporarily push down paper gold prices, for the purpose of avoiding payouts on call options. Generally speaking, gold speculators buy many more gold calls than puts, so paying out on a rise in gold prices usually costs a great deal more than paying out after a fall in gold prices. The incentive to manipulate prices to prevent options from ending “in the money” is huge.

COMEX February options expiration day was the 26th of January, and it was the day of reckoning when buyer and seller determined how much, if anything, was owed on the matured options contracts. It is also my understanding that many of the privately negotiated “calls” at the various London’s LBMA member banks expired on the 27th. If the options dealers had not launched a coordinated attack on gold prices last week, a huge number of their “call” options would have expired heavily “in the money”. That would have meant billions paid out. Naturally, since casinos always make sure that the house never loses, the payouts won’t happen, thanks to the manipulations.

The most important thing to realize is that price manipulations, around options expiration, are always pure paper plays, and have no legs. However, they won’t end simply because access to the US gold reserve is cut off.  Such activities will continue until gold options are made illegal, or the people responsible are criminally prosecuted. A change in Presidential administrations may bring a lot of macro-level reform, including replacement of the people at the very top of the totem pole. However, regulatory staff members remain the same, as do the attorneys who work for the Department of Justice. So long as men and women continue to enter and exit federal agencies through a revolving employment and “consulting” door, into banks and brokerage houses, no serious prosecution is ever going to happen.

Far more important than the temporary manipulation of options dealers, however, is the physical market for real gold. January is an off-month for deliveries at COMEX. However, the number of gold futures contracts that stood for delivery this month resembles an active delivery month. That is interesting because COMEX has always been primarily a paper based exchange. Physical delivery is the exception rather than the rule. Delivery has always been theoretically possible, but it has been rarely done. In January 2016, for example, the holders of only 172 COMEX futures contracts demanded physical gold. In comparison, by January 27, 2017, the holders of 1,254 COMEX futures contracts held them to maturity and demanded their gold! That is a whopping 729% increase yoy!

We’ll see what happens in February. There are already an unusually large number of February contracts remaining open on Friday, a day before the first notice day. Monday is the first notice day for the February delivery month, which has always been a major one. This month is shaping up to be mildly historic in size. The overall delivery size looks like it will be at least as big as December, 2016, even though December is normally the largest delivery month by far. One thing is clear. As of Monday morning, holders of matured futures contracts are going to have to put up or shut up. They must either deposit sufficient cash to pay for the gold in full, or face involuntary liquidation.

No matter how massive the physical delivery demand may be, there is always the possibility that dealers will try to attack prices early in the month. They often do this. I believe that the reason revolves around the desire to buy physical gold bullion, from mining companies and others, at a rock-bottom price. They will do everything they can to create a fake price so long as it doesn’t cost them too much. The trouble for them is that, this month, it may cost them more to do it than they save from the results.

There always seem to be a number of “stragglers” among the contracts that are open on the first day of delivery. These speculators cannot afford to pay for their gold, but seem to foolishly hold onto their contracts anyway. They end up involuntarily liquidated and that process will always facilitate downward price manipulation. Because of the prospective size of February’s physical delivery (which is probably mirrored at the LBMA in London), however, gold prices should be resilient to this type of manipulative activity.

I think the rise in gold prices will begin, in earnest, somewhat earlier than usual this month. It should occur, at the latest, by the middle of the month, or even a lot earlier, as opposed to the typical late-in-the-month price rise that often occurs during big delivery months. The massive and very unusual physical demand in January is likely to have exhausted many of most easily accessed supplies, which will make it particiularly difficult for banksters to maintain such shenanigans.

Looking further out, as I have said before, other precious metals prices in 2017 will also be driven upward, by being cross traded with gold, as a result of the closure of the US gold reserve. A vast majority of the people surrounding President Donald Trump are not inclined to allow continued drainage of America’s golden treasure. Incoming Treasury Secretary Mnuchin has given lip service to the “strong” dollar policy, but both he and President Trump have stated that the US dollar is now overvalued. The impact of lower exports and higher imports on GDP has already showed up in dismal GDP performance numbers.

Political cooperation with bankster driven gold price manipulation has always been primarily driven by a desire to stabilize and/or prop up the exchange value of the US dollar. Since America’s leaders now want the dollar down, not up, giving access to the US gold reserve makes no sense. It will be cut off as soon as Obama’s gold-related executive orders come to Mr. Trump’s attention. That should happen a few days after the new Treasury Secretary is confirmed.  I have no doubt that the dealers are acutely aware of the fact that Obama’s not-so-secret orders, opening up the gold reserve to gold location swaps and other access, are now history. Downward price manipulation, at the current low pricing point, will become difficult or impossible. In the absence of the US Gold Reserve, prices must rise substantially before highly profitable manipulative activity can begin again.

The reversal of Obama’s executive orders are likely to be as much of a secret as the executive orders themselves were. I don’t expect any formal announcement as such. When it does finally happen, however, there should be a sudden price surge. That doesn’t mean gold is suddenly going to rise to $5,000+ per ounce. That will eventually happen. However, normal markets do not rise like rocketships. Prices may rise by $75 to $100 over a week or two. That is healthier than a massive $300 overnight skyrocket. Massive quick increases in any asset price, in the absence of some unusual major outside event, is the result of upside oriented market manipulation.

We will eventually see a lot of upside manipulation in gold prices (followed by repeated short price collapses) as manipulators turn their attention to profiting, in a different manner, from price volatility. The key point is that when gold prices finally move above the equilibrium point between supply and demand, they can be pushed upward, and then allowed to fall, without any need for physical gold. Until that change in orientation, however, we will see prices driven upward solely by the continuing excess of physical buyers over sellers.

Note that physical precious metals buyers, unlike futures market speculators, are thrifty people who don’t like overpaying. This won’t stop the early stages of a fast price rise, but it will begin to put downward price pressure, in the short run, if prices go too far too fast. Physical buyers stop buying when prices rise very fast. They will resist purchasing until they get used to new prices. The process requires time. That’s why gold price destabilization, rather than price suppression, is the primary goal of gold market manipulators. I expect the price of gold to rise slowly but steadily back to its prior supply/demand equilibrium point (somewhere between $1,500 and $1,600 or a bit higher).

If major upside manipulation events begin or a major outside event occurs, like a major default on corporate and government bonds, widespread insolvency of pension plans and/or the demise of the Euro currency, the sky will be the limit. Evidence of fiat currency instability will be so high, once the Eurozone collapses, that a much higher floor will be put underneath precious metal pricing.

__________________________________________________________________

Buy Synod“It moves fast, kind of like Robert Ludlum’s “Jason Bourne” trilogy…”

–  Josh Pullman –

THIS IS THE NOVEL THE INTERNATIONAL BANKSTERS DON’T WANT YOU TO READ!

CLICK HERE TO BUY THE PAPERBACK

CLICK HERE TO BUY AMAZON’S KINDLE

ALSO AVAILABLE AT APPLE iBOOK, KOBO, BARNES & NOBLE AND OTHER FINE BOOK SELLERS

The Synod is a conspiracy of 8 large international banks who seek to control gold, stock, bond and commodity markets all over the world. Jack Severs runs for his life when he learns too much, as the most sophisticated surveillance system ever built is deployed to track him down. As the ever-tightening noose closes, he struggles to uncover evidence to save himself and his world from collapsing! An exciting, fictional, fun and educational thriller about the banking cartel. Learn about the methods used to manage the price of gold and every other market on the planet, and how this affects business, politics and daily life in both the fictional and real worlds.

A GREAT GIFT!

 

DEBUNKING THE MYTH OF THE “P/E RATIO”

stock-exchange-738671_1280

Written By:  Avery B. Goodman

Summary

The Price/Earnings Ratio is touted as a means of predicting stock price movement.

The Price/Earnings Ratio Has No Value in Predicting Future Stock Movement.

A stock price crash may be coming but the currently inflated S&P 500 P/E Ratio is meaningless.

The price/earnings ratio, or “P/E ratio”, is the current price of one share divided by the earnings per share of the company. Over the years, a lot of financial advisors and market gurus have pointed to this number as a method by which to determine whether a company’s share price will rise or fall. Others look at the P/E ratio as a way to determine whether stock indexes are susceptible to a big downturn.

If the ratio is low, some claim that a company’s stock valuation is “safe” and share prices are likely to rise. In contrast, if the ratio is high, they say share prices are likely to fall. That seems simple and intuitively sound doesn’t it? A nice simple idea like that always excites people. Other gurus decided to expand on it. They applied the idea to the broad indexes of stocks, coming up with a P/E ratio for the broad stock market, most often using the S&P 500. According to them, if the ratio of the S&P 500 is “dangerously high”, stock prices are “susceptible to a bear market.” Conversely, when ratios are low, they believe that the market will rise.

Unfortunately, it isn’t true.

The interest rate manipulations of a central bank are far more important than any other factor in a myriad of ways, even beyond the subject of stocks and economics. When people asked me how I knew that Donald Trump would be the next U.S. President a week before the election, for example, I answered by writing an article, and explaining that my insight came purely from observing gold price manipulation. If you want to learn how this works, read the novel “The Synod”.

At any rate, I made offhand mention of the fact that the Obama administration has helped create the biggest financial bubble in history. It triggered an unhappy comment from a stock-loving reader, who assumed I was talking about an impending crash in stock prices. I was actually talking about the bond market, which has a value several orders of magnitude larger than the stock market.

However, his comment raised some issues that beg clarification. The commenter insisted that stocks cannot crash because the S&P 500’s current P/E ratio is not historically high. At slightly over 25 to 1, he is wrong. It is historically high. It is simply not inside astronomical territory. But, it is a bit on the high side. History tells us that crashes don’t need to be preceded by astronomical P/E ratios.

Thankfully, for current stock investors, generally speaking, P/E ratios don’t matter much to future bull or bear trends. The ratio is most useful for evaluating the ability of a company to pay a dividend and for nothing else. That doesn’t mean stocks aren’t about to crash. It simply means that a modestly high or low P/E ratio has no predictive ability, whatsoever, when it comes to the future of stock prices. It never has. Never once! Just the opposite!

For example, the decline in stock prices at the beginning of the so-called “Great Recession” began in Fall of 2007. The S&P 500 P/E ratio was only a bit over 19 to 1! By January 2009, one year and four months later, stocks declined a lot. In spite of that, the P/E ratio had still risen to about 71! That’s when the fastest decline began (between January and mid-March 2009).

The key point is that the 71 to 1 ratio in January 2009 was not a result of rising stock values. It occurred because most investors fell behind the curve. They hadn’t dumped stocks vigorously enough to force prices down all the way yet. Earnings had simply fallen faster than stock prices, but stock prices were already in a bear market!

When the dot.com bubble started to burst, back in March, 2000, the S&P 500’s P/E ratio was a bit over 28 to 1. By August 2003, in spite of stocks having dropped by a huge amount, the P/E ratio was still 26.57. Again, investors fell behind the price drop. Another classic example was at the beginning of the Great Depression of the 1930s. In the late 1920s, the Federal Reserve flooded dollars into the economy to assist the British central bank in managing a floundering post-war British pound. With a massive increase in the money supply, American business artificially boomed.

The so-called “Roaring 20s” were an era in which earnings and dividend payments increased quickly. Every investment seemed to pay off. Stock prices followed but not in excess of the rise in company earnings. Like today, people dreamed about getting rich quick trading stocks. Earnings were so good that by January 1929, the S&P 500 P/E ratio was only a bit under 17.76. That was in spite of skyrocketing stock prices.

By October, 1929, however, the P/E ratio still stood at 17.83. By February 1933, when stock prices had finally fallen to about 10% of their value in 1929, the S&P 500 P/E ratio was 14.88! Here is the bottom line… in spite of the 90% decline in stock prices, the P/E was not very different from when prices were 900% higher!

What does that tell you, my friends? Many may be wondering how this could be possible? Most of your adult life, or at least that part of it in which you’ve been listening to the propaganda from talking heads, University Professors, and business media writers, you’ve always been told that P/E ratios matter.

They do matter, just not to whether a stock is about to go up or down. They matter with respect to the ability of a company to pay you a certain level of dividends. With respect to everything else, forget all P/E ratios. In a perfect world conceived in unrealistic economic theory, the P/E ratio might matter. It just doesn’t matter in our world.

That’s because in a stable economy, earnings would be a measure of how well run a company is. But, we don’t have an economy like that. What we have are central banks who determine bull and bear markets, by flooding money in and out of financial markets. The efficiency of company management is a factor, but a small one, when you compare it to the overall financial conditions created by this central banking manipulative activity. That’s why, in our world, the P/E ratio has no predictive value.

In the real world, earnings react to the money supply just like stock prices. When the money supply goes up, and interest rates go down, earnings go up and so do stock prices. The situation ends up artificial and temporary but that is what happens. You can complain about it all you want. You should complain and try to change things. But, for now, it’s as simple as that.

That’s why P/E ratios cannot predict individual share prices in the future. It is also why they certainly cannot predict whether or not a bull or bear market is on the way. Remember, again, that the earnings of all companies ALWAYS go up when a central bank increases the money supply. That’s got nothing to do with the quality of the management team in any one company, or all the companies listed on the S&P 500 index.

The decisions of the central bank and the government are the primary things that determine whether stock prices crash or continue upward, but there are a few relevant questions you can ask. Once a lot of money has been printed, is the central bank going to significantly raise rates? Will they constrain liquidity? Will they narrow the loan windows from which banks can loan hedge funds and other speculators money? If so, there will be a crash.

How big the crash will be is determined by how big the preceding bubble was. But, if they never raise rates, constrain liquidity or close loan windows, the ultimate result will be a collapse of the currency itself. To keep a boom going you not only can’t significantly raise interest rates, but you’ve got to keep the money spigot open and flowing. The amount of time it takes to collapse is primarily determined by how clever and believable the countering propaganda is.

In practical terms, going forward, if the Federal Reserve allows interest rates to rise significantly, it won’t matter whether the S&P 500’s P/E ratio is high or low. Earnings will fall, and the P/E ratios will rise unless stock prices drop (which they will). The current P/E ratio will have nothing to do with that.

Don’t get me wrong. What I have just told you doesn’t mean stock prices are about to crash. It just means that you should not be relying on P/E ratio’s to determine whether there is “froth on the stock bubble”, as some pundits like to put it. Current P/E ratios have NO VALUE in predicting future P/E ratios and, therefore, no value in predicting price movement.

The fact that P/E ratios are not in the stratosphere, right now, will do nothing to stop or slow down a potential stock price crash. That’s why, in my opinion, the safest bet, right now, is not general stock investment at all, but rather precious metals and mining companies. I don’t come to this conclusion based on P/E ratios, but on the probability that the Federal Reserve will be raising interest rates, and the fact that there is an insufficient quantity of gold to supply the market, as explained in more detail here.

History tells us that it is more likely that stocks will decline if P/E ratios are astronomically high and prices have already been heading down. But, almost all major stock market crashes including the Crash of 1929, the dot.com Crash of 2000, and the “Great Recession Crash of 2007 – 09” BEGIN with very modest S&P 500 P/E ratios. Therefore, be careful to evaluate the future based based on what the central bank does, not on P/E ratios.

Appended, below, is a list of the S&P 500’s P/E ratio at all points discussed in this article.

__________________________________________________________________________________

Buy SynodBREAKING NEWS!! “The Synod” has pierced the “Top 100 Financial Thriller Bestsellers” list at Amazon.com!

The Synod is a conspiracy of 8 large international banks who seek to control gold, stock, bond and commodity markets all over the world. Jack Severs runs for his life when he learns too much, as the most sophisticated surveillance system ever built is deployed to track him down. As the ever-tightening noose closes, he struggles to uncover evidence to save himself and his world from collapsing! An exciting, fictional, fun and educational thriller about the banking cartel. Learn about the methods used to manage the price of gold and every other market on the planet, and how this affects business, politics and daily life in both the fictional and real worlds.

________________________________________________________________________________________

PRICE/EARNINGS RATIO OF THE S&P 500 INDEX STOCKS
(Source: Schiller, Robert “Irrational Exuberance”
http://amzn.to/2fQ4kOV)

Date                  Value

11-25-16              25.46  (estimate)

Oct 1, 2016          24.53

Sep 1, 2016         24.82

Aug 1, 2016         24.98

Jul 1, 2016            24.72

Jun 1, 2016          23.97

May 1, 2016        23.81

Apr 1, 2016          23.97

Mar 1, 2016         23.39

Feb 1, 2016         22.02

Jan 1, 2016          22.18

Dec 1, 2015         23.74

Nov 1, 2015         23.67

Oct 1, 2015          22.68

Sep 1, 2015         21.45

Aug 1, 2015         22.15

Jul 1, 2015            22.40

Jun 1, 2015          22.12

May 1, 2015        21.92

Apr 1, 2015          21.42

Mar 1, 2015         20.96

Feb 1, 2015         20.77

Jan 1, 2015          20.02

Dec 1, 2014         20.08

Nov 1, 2014         19.75

Oct 1, 2014          18.50

Sep 1, 2014         18.81

Aug 1, 2014         18.68

Jul 1, 2014            18.96

Jun 1, 2014          18.88

May 1, 2014        18.46

Apr 1, 2014          18.35

Mar 1, 2014         18.48

Feb 1, 2014         18.06

Jan 1, 2014          18.15

Dec 1, 2013         18.04

Nov 1, 2013         18.15

Oct 1, 2013          17.86

Sep 1, 2013         17.88

Aug 1, 2013         17.91

Jul 1, 2013            18.12

Jun 1, 2013          17.80

May 1, 2013        18.25

Apr 1, 2013          17.69

Mar 1, 2013         17.68

Feb 1, 2013         17.32

Jan 1, 2013          17.03

Dec 1, 2012         16.44

Nov 1, 2012         16.12

Oct 1, 2012          16.62

Sep 1, 2012         16.69

Aug 1, 2012         16.14

Jul 1, 2012            15.55

Jun 1, 2012          15.05

May 1, 2012        15.22

Apr 1, 2012          15.70

Mar 1, 2012         15.69

Feb 1, 2012         15.37

Jan 1, 2012          14.87

Dec 1, 2011         14.30

Nov 1, 2011         14.10

Oct 1, 2011          13.88

Sep 1, 2011         13.50

Aug 1, 2011         13.79

Jul 1, 2011            15.61

Jun 1, 2011          15.35

May 1, 2011        16.12

Apr 1, 2011          16.21

Mar 1, 2011         16.04

Feb 1, 2011         16.52

Jan 1, 2011          16.30

Dec 1, 2010         16.05

Nov 1, 2010         15.88

Oct 1, 2010          15.90

Sep 1, 2010         15.61

Aug 1, 2010         15.47

Jul 1, 2010            15.72

Jun 1, 2010          16.15

May 1, 2010        17.30

Apr 1, 2010          19.01

Mar 1, 2010         18.91

Feb 1, 2010         18.91

Jan 1, 2010          20.70

Dec 1, 2009         21.78

Nov 1, 2009         28.51

Oct 1, 2009          42.12

Sep 1, 2009         83.30

Aug 1, 2009         92.95

Jul 1, 2009            101.87

Jun 1, 2009          123.32

May 1, 2009        123.73

Apr 1, 2009          119.85

Mar 1, 2009         110.37

Feb 1, 2009         84.46

Jan 1, 2009          70.91

Dec 1, 2008         58.98

Nov 1, 2008         34.99

Oct 1, 2008          27.22

Sep 1, 2008         26.48

Aug 1, 2008         26.83

Jul 1, 2008            25.37

Jun 1, 2008          26.11

May 1, 2008        25.81

Apr 1, 2008          23.88

Mar 1, 2008         21.81

Feb 1, 2008         21.74

Jan 1, 2008          21.46

Dec 1, 2007         22.35

Nov 1, 2007         20.81

Oct 1, 2007          20.68

Sep 1, 2007         19.05

Aug 1, 2007         18.02

Jul 1, 2007            18.36

Jun 1, 2007          17.83

May 1, 2007        17.92

Apr 1, 2007          17.48

Mar 1, 2007         16.92

Feb 1, 2007         17.49

Jan 1, 2007          17.36

Dec 1, 2006         17.38

Nov 1, 2006         17.24

Oct 1, 2006          17.14

Sep 1, 2006         16.77

Aug 1, 2006         16.67

Jul 1, 2006            16.61

Jun 1, 2006          16.82

May 1, 2006        17.46

Apr 1, 2006          17.77

Mar 1, 2006         17.80

Feb 1, 2006         17.80

Jan 1, 2006          18.07

Dec 1, 2005         18.07

Nov 1, 2005         18.01

Oct 1, 2005          17.64

Sep 1, 2005         18.44

Aug 1, 2005         18.72

Jul 1, 2005            19.00

Jun 1, 2005          19.00

May 1, 2005        18.93

Apr 1, 2005          19.02

Mar 1, 2005         19.84

Feb 1, 2005         20.11

Jan 1, 2005          19.99

Dec 1, 2004         20.48

Nov 1, 2004         20.05

Oct 1, 2004          19.25

Sep 1, 2004         19.35

Aug 1, 2004         19.03

Jul 1, 2004            19.51

Jun 1, 2004          20.17

May 1, 2004        20.14

Apr 1, 2004          21.23

Mar 1, 2004         21.62

Feb 1, 2004         22.46

Jan 1, 2004          22.73

Dec 1, 2003         22.17

Nov 1, 2003         23.15

Oct 1, 2003          24.75

Sep 1, 2003         26.42

Aug 1, 2003         26.57

Jul 1, 2003            27.65

Jun 1, 2003          28.60

May 1, 2003        28.24

Apr 1, 2003          28.05

Mar 1, 2003         27.92

Feb 1, 2003         28.46

Jan 1, 2003          31.43

Dec 1, 2002         32.59

Nov 1, 2002         32.03

Oct 1, 2002          29.24

Sep 1, 2002         28.89

Aug 1, 2002         31.53

Jul 1, 2002            32.46

Jun 1, 2002          37.92

May 1, 2002        41.41

Apr 1, 2002          43.81

Mar 1, 2002         46.71

Feb 1, 2002         44.57

Jan 1, 2002          46.17

Dec 1, 2001         46.37

Nov 1, 2001         43.62

Oct 1, 2001          39.72

Sep 1, 2001         36.90

Aug 1, 2001         37.85

Jul 1, 2001            35.46

Jun 1, 2001          33.67

May 1, 2001        32.02

Apr 1, 2001          27.96

Mar 1, 2001         26.10

Feb 1, 2001         27.81

Jan 1, 2001          27.55

Dec 1, 2000         26.62

Nov 1, 2000         26.90

Oct 1, 2000          26.50

Sep 1, 2000         27.34

Aug 1, 2000         27.97

Jul 1, 2000            28.05

Jun 1, 2000          28.16

May 1, 2000        27.49

Apr 1, 2000          28.50

Mar 1, 2000         28.31

Feb 1, 2000         27.76

Jan 1, 2000          29.04

Dec 1, 1999         29.66

Nov 1, 1999         29.74

Oct 1, 1999          28.66

Sep 1, 1999         29.99

Aug 1, 1999         30.89

___________________________________________________________________________

GREAT DEPRESSION ERA STATISTICS

Feb 1, 1933

14.88

Jan 1, 1933          17.29

Dec 1, 1932         16.63

Nov 1, 1932         16.40

Oct 1, 1932          16.18

Sep 1, 1932         17.96

Aug 1, 1932         15.69

Jul 1, 1932            10.22

Jun 1, 1932          9.35

May 1, 1932        10.40

Apr 1, 1932          11.63

Mar 1, 1932         14.75

Feb 1, 1932         14.19

Jan 1, 1932          14.07

Dec 1, 1931         13.84

Nov 1, 1931         16.23

Oct 1, 1931          15.30

Sep 1, 1931         16.90

Aug 1, 1931         19.04

Jul 1, 1931            18.86

Jun 1, 1931          17.56

May 1, 1931        17.48

Apr 1, 1931          18.66

Mar 1, 1931         19.92

Feb 1, 1931         18.90

Jan 1, 1931          17.00

Dec 1, 1930         15.99

Nov 1, 1930         16.29

Oct 1, 1930          16.59

Sep 1, 1930         18.39

Aug 1, 1930         17.62

Jul 1, 1930            16.98

Jun 1, 1930          16.68

May 1, 1930        17.87

Apr 1, 1930          18.19

Mar 1, 1930         16.51

Feb 1, 1930         15.38

Jan 1, 1930          13.92

Dec 1, 1929         13.29

Nov 1, 1929         12.94

Oct 1, 1929          17.83

Sep 1, 1929         20.19

Aug 1, 1929         19.67

Jul 1, 1929            18.86

Jun 1, 1929          17.43

May 1, 1929        17.34

Apr 1, 1929          17.32

Mar 1, 1929         17.66

Feb 1, 1929         17.60

Jan 1, 1929          17.76