@Hisah. You will notice from the ratio of Gold Miners:SPDR Gold Trust that the former has been under performing the latter to the angst of investors. Prior to 2006, gold miners took the lead over gold bullion. Whereas, the 2007 - 2008 crash caused a pause in action, the good old days of 10x appreciation of gold mining stocks are a distant memory. The burning question is why?
Markets are always right. We may not understand the market moves but with the benefit of hindsight, the causes become clear over time. One variable that changed after the 2006 food price surge was the advent of global unrest. The hot spots were the Middle East, Africa and parts of Asia. Politicians, true to form, began talk of nationalizing mines and increasing taxes on profits to placate the restless citizenry. To investors, a red flag was raised. More recently, unrest has spread with the overthrow of some political figures.
Even the most intrepid of mining executives are unsure of the unfolding situation in Africa, as we are into 4 years of drought with 3 more to go. Does that spell safety for their establishments and profits?
Mexico is in the midst of a drug war. I have good intel suggesting that it could spark off a revolution. Be careful for we are in the era of revolution until 2018.
It therefore makes perfect sense for the market to choose the gold ETF over gold mining stocks.
There may be a light at the end of the tunnel, the ratio of Gold Miners:SPDR Gold Trust Index may have bottomed in mid June along with Martin Armstrong's ECM, a bullish signal for the next 4.3 years if the low holds.
Real Estate in the Western world should decline until 2020 or 2033 at the extreme. Kenya is an outlier whose real-estate market follows its own beat. May have had a 7 year bull market (2004 - 2011) or will it extend for a 11 year rally?
Speaking of defaults, the year here is 1927: "Perhaps it was jealousy that made government feel like it was missing out on the action. After inventing the inheritance taxes, government constantly sought new ideas for innovative taxation. The Census Bureau released its calculations for real estate taxes collected during 1925 in 247 cities. The valuations for tax purposes came up to $63.5 billion. New York was valued at $12.9 billion, Philadelphia $3.9, Chicago $1.8, Boston $1.8 and Los Angles $1.3 billion. The taxes levied were $2.5 billion and the national deficit on the local level was $400 million. Only 44 cities out of 247 had collected enough in taxes to meet obligations. Many local governments continued to waste money and raised necessary funds through new bond issues. Many of these issues would go into default once the Great Depression hit. The City of Detroit’s bond issue would be one example of a default which was not redeemed until 1963." The Greatest Bull Market In History, Martin Armstrong
Notice that with the case of Alabama, Minnesota, Illinois etc, the problems started prior to the Global Financial Crisis.