comparing this to just one bear market, the last true one, in 2008/2009....what happened is that GDX really got hammered. It peaked in march, as I recall, St. Patrick's day to be specific (or at least gold the metal did, I forget which but won't forget that day as I was making a ton in the miners...blah blah..that gold bull had been raging for years...)...and then gold and the miners followed the coming bear market down, which lasted about a year, and was very severe....at some point, gold and the miners quit going down....well before that bear ended.
The miners at the time the markets started cratering into the bear, were richly priced. All of the top ones, the ones with earnings, were all priced at 30 to 45 to 1 PEs....it was very frothy, and while the housing bubble existed, and the market was rich.....inflation was not remotely the issue it is today....Relative to today inflation back then was tame, with the exception of the housing bubble.......now of course, it is widespread and far more severe.
Today there is no question inflation in basically everything is roaring at least 12% annually.....The gold miners have also been in their own bear market for the last 18 months, and their PEs are very reasonable at around 17 to 1 PE.... Precious metals miners typically have PEs much closer to about 25 to 30 to 1.
In effect, we have ALREADY been in a year and a half bear, and our PEs are very reasonably priced, the entire producer sector.
What will catalize gold to exceed its recent highs of 2150? When people come to the realization that the FED has no where to run. If it jacks up rates by 4 more points, the entire country and the markets will crater......It is the realization that the FED is now entering that helpless time, where before it has been all powerful. The government Hoax and financial industry Hoax is about to be revealed. ....and then gold will get tons of interest as the existing financial REGIME is revealed to be a paper tiger, against 10 percent inflation......
one more point: The Paul Volker analogy for the late 70s bear market is misguided. Back then, the country had relatively sound finances, even with the roaring inflation...........today we give away billions every week, for this or that, a congress out of control.....and owing 31 trillion..and growing by leaps and bounds........America's goose is so cooked and once people and managers start to perceive this, they will try to safeguard by moving into gold to at least keep what they have.
That is the thesis moving forward.
