NIA has just posted to Inflation.us, its most extraordinary interactive chart in history! NIA’s brand new one-of-a-kind exclusive interactive chart allows you to quickly and easily compare the 38-year percentage gains of the Dow Jones, oil, all four precious metals, copper, ten major agricultural commodities, and the Real U.S. Money Supply. It includes an interactive slider, which allows NIA members to customize the chart to any short or medium-term time period, within the initial long-term range.
Over the last 38 years, from May 1976 through May 2014, NIA’s “Real U.S. Money Supply” comprised of currency component of M1, total checkable deposits, and total savings deposits at all depository institutions – has increased by a stunning 2,009%. NIA’s chart shows that during this time period, the Top 10 best inflation hedges in order were: 1) palladium, 2) the Dow Jones Industrial Average, 3) gold, 4) platinum, 5) crude oil, 6) copper, 7) silver, 8) live cattle, 9) orange juice, 10) soybeans.
What makes NIA’s chart so useful is how using the interactive slider, you can compare the long-term performance of these commodities/assets to their performance during any short or medium-term period. It illustrates how assets go through long-term “secular” bull/bear markets, medium-term “primary” bull/bear markets, as well as short-term “secondary” bull/bear trends. It also shows how the best performing asset during a short/medium-term time period can shift to being the worst performing and vice-versa.
If you customize the chart slider to display May 1976 through the end of January 1980, you will see that during this 44-month time period – silver prices gained 659%, gold prices gained 441%, platinum prices gained 407%, palladium prices gained 400%, and oil prices gained 190% – while the Dow Jones was the second worst performing asset type, declining 10%.
However, over the following 20 years, the Dow Jones became the best performing asset type – rising 1,149%, while silver became the worst performing asset – declining 85%. Gold from its peak in 1980 declined over the following 20 years by 55%.
Afterwards, from February 2000 through the end of April 2011, silver became the biggest gainer once again – rising 819%, and gold became the second biggest gainer – rising 450%. The Dow Jones shifted back to being the worst performer, rising only 17%.
Then from May 2011 through year-end 2013, their directions once again dramatically reversed, with the Dow Jones being the best performing asset type – rising 29%. Meanwhile, silver during this 32-month period was the second worst performer – declining 60%, while gold declined 23%.
The biggest decliner between May 2011 and year-end 2013 was coffee, which fell by 63%. After this decline for coffee, as of year-end 2013, coffee was down 22% from the beginning of the chart in May 1976 – the only asset on the chart to decline during this 37 1/2 year time period. Clearly, coffee was severely oversold and appeared to be the most undervalued commodity at year-end 2013.Not surprisingly, so far in 2014, coffee has bounced big – rising year-to-date by 76% – making coffee the best performing asset of 2014 by far. NIA predicted in December 2013 that agricultural commodities would be the best performing asset type of 2014, and so far this year – the top 4 best performing assets and 7 of the top 8 best performing assets are agricultural commodities. In the first 4 1/2 months of 2014, in addition to coffee rising 76% – lean hogs are up 39%, corn is up 15%, orange juice is up 14%, wheat is up 12%, soybeans are up 12%, and sugar is up 11%. NIA also predicted in December that gold would gain big in 2014 – and gold has so far increased this year by 8%.
The biggest gaining precious metal of 2014 so far has been palladium, which is up 13% year-to-date. NIA announced palladium on April 10, 2014, as its favorite precious metal for the very short-term at $792.30 per oz – and on May 14, 2014, palladium reached a new 52-week high of $829.20 per oz. NIA expects palladium to surpass its 13-year high of $857 per oz in the very near-future.
NIA expects to see significant gains for gold this year. Silver is by far the most undervalued precious metal and will make the largest long-term gains, but in the short/medium-term, we expect gold to lead the way.
Coffee appears to have gained too much too soon. NIA expects sugar to become the best performing agricultural commodity moving forward and is also extremely bullish on cotton.Click here to access the interactive chart.