Gold to Silver Ratio Defines Hemorrhage and Liquidity Phases

The market will continue to cycle between hemorrhage and liquidity phases as central planners attempt to mitigate the debt burden of the previous expansion through currency debasement. The trend in the spread between gold and silver provides an excellent measure of risk aversion to risk-taking or the identification between hemorrhage and liquidity phases. Contrary to consensus expectations, the liquidity phase that started in 2008 and normally represented in two steps down has yet to complete.

Gold and Silver Ratio: