Issue link: http://resourceworld.uberflip.com/i/294363
www.resourceworld.com 15 A P R I L / M A Y 2 0 1 4 are precious metal markets being ma- nipulated, but all markets are being ma- nipulated, including the stock and bond markets. The Federal Reserve is buying copious amounts of US Treasuries which affects the value of the dollar. The stock market is being manipulated by the infu- sion of massive amounts of paper money by the Federal Reserve into the banking system. This makes it difficult to do the normal kind of technical analysis to understand where markets are going to go. The cy- cles I write about are natural events and eventually they revert back to normal behavior. This manipulative interference is overcome by the natural cycles. RW: What do your charts indicate for the future of gold? IG: I am very bullish. One of the easiest ways to really understand the gold rela- tionship to paper currency is to evaluate the Dow/gold ratio, that is, the value of the Dow Jones Industrial Average divid- ed by the price of an ounce of gold. If you do that, you can see that through all these cycles that stocks have an advan- tage over gold at one stage in the cycle and then gold has an advantage over stocks in the next stage, and so on. Over the long term, the price of gold and the price of the general stock market are al- ways working opposite to each other. This ratio can tell you where we are like- ly to go. That relationship reached a peak in July 1999 when it took 44 ounces of gold to buy the Dow Jones Industrials. We went down to a low where it took only less than six ounces to buy the Dow Jones Industrials. We are at about 11 right now. Eventually that relationship is going to come back to something akin to one-to-one where it has been twice be- fore – in 1896 and 1980. Eventually, the ratio could indicate that a quarter of an ounce of gold could buy the value of the Dow Jones Industrials. RW:Are you also bullish on silver? IG: Because of my cycle work, I am not as bullish on silver as gold. My cycles tell me that we are heading into a depression like the 1930s. The central banks are try- ing to hold that back by massive mon- etary printing. We know that when the stock market peaked in 1929 and the US banking and credit system started to col- lapse following that stock market peak there was a massive run to own gold. Everybody wanted to own gold because they didn't trust the paper dollar. At that time, you could easily exchange your dollars for gold at US $20.67 an ounce. Gold stocks themselves did outstand- ingly well. I am of the view that the fiat currency system is starting the next stage of its collapse. This will drive the price of gold exceedingly high. Between 1929 and 1933, the price of silver actually dropped from 75 cents an ounce to 25 cents an ounce. People were not interested in silver as a monetary metal as it was also an industrial metal – even more so today. I do believe silver will have a monetary role, but it will be far less pervasive than gold's monetary role. RW: What is the Longwave Cycle season and where are we in that cycle? IG:The Longwave Cycle is a lifetime cycle because we can live only through one cy- cle. We have divided the cycle into four "seasons" which are each about a quarter of the length of the entire cycle which is 60 to 70 years long. Spring is the rebirth of the economy (the upswing); summer is the time when the economy reaches its zenith (boom and inflation). Autumn is what I call the "feel good" period when it's the best time for stocks, bonds and Ian Gordon "I am very bullish. One of the easiest ways to really understand the gold relationship to paper currency is to evaluate the Dow/gold ratio, that is, the value of the Dow Jones Industrial Average divided by the price of an ounce of gold."