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 This is the capital rotation indicator. You'll see a sort of matrix in the top lefthand corner there. And what's in those red boxes is US money supply which is in a bare market versus gold. Uh DXY is in a bare market versus gold. Then we've got gold breaking out versus CPI, PPI, currency in circulation, the equal weighted S&P, NYA, which is the New York composite, the Dow Jones, the Wilshire, the Russell, and gold is breaking to a bull market versus the S&P and NASDAQ at the moment. And there's a little bit of

a caveat on that. It probably just needs to fall a little bit further to give ultimate [Music] confirmation. Hello, Golds family. Alan Hibbert here with another video and today I'm sitting down with the co-founders of Northstar Bad Charts to discuss the capital rotation event and what it means for gold and silver. Kevin and Patrick have joined me and they're going to talk about the significance of all the capital in the world moving from the stock market into gold and silver and what that's going to mean for the

next few years. So Kevin and Patrick, thank you so much for being here. Hey Alan, thanks for thanks for inviting us on the show. It's it's good to be here. Yes, thanks Alan. Before we go any further, let's discuss what a capital rotation event is and why it's so significant for people. Um, it's my understanding that, you know, the average person might only see one or two of these events in their lifetime. Um, and yet it's a tremendous opportunity to attain wealth. So, what is the capital

rotation event? Yeah, sure. Well, the term capital rotation doesn't just apply to um stock markets and gold. It applies to movement of capital broadly between different sectors within the investment um landscape really. It could be you know any kind of movement of of capital that you can uh track using um using technical analysis. Essentially you can um compare one chart with another and spot these es and flows in the markets. That's capital rotating away from for example technology stocks to perhaps um

you know um resource stocks or whatever it happens to be. So that the term capital rotation isn't anything new, but if you can spot when there's this turning point in history between precious metals and stock markets, and it doesn't happen very often. It might only happen once every 20 years or so. If you can catch that in the early stages, either when it's rotating away from precious metals towards stock markets or in the opposite direction, then everything else comes from that.

Pat described it as the Rosetta Stone. And that's kind of what it is because once you get that right, then everything else flows from that. When this ratio chart is moving upwards, it means gold is outperforming the stock market. Yes. And when this ratio chart moves down, it means that gold is underperforming the stock market. So that black line on the top chart there, that's tracking whether gold and precious metals and commodities are outperforming stock markets or whether they're not. And because this is

a huge cyclical process that takes place, it's like trying to turn an oil tanker. You can't turn it on a dime. It takes a long time to turn. So you get years to spot the turning process. And then when the confirmation comes in, that's the time to to really go strong in the right direction, either stock markets or precious metals and commodities. These cycles, it's they're they're always instigated with a recession, a market downturn. The more severe the market downturn, the more um

the more strength it gives to to the uh capital rotation. Often you could see it as the the and we have a chart later on covering the debt, the government stimulus programs, bailouts, etc. And that fuels on the recovery side, it fuels the precious metals. And this and this chart here, the it's the same gold versus the stock market, gold versus the S&P 500. But what we've done on here is we've labeled the CRA, the capital rotation event. So you can see around about 19707172 uh the chart started to move upwards

very strongly. That was a capital rotation event with gold outperforming the S&P. Gold was pegged at the time of course during the early stages of that process. So hence probably the Vshape to that uh capital rotation event. Um very first one is the 1930 event and the second one is the 1970s event. The third one is the 2000 event and then the uh the fourth one there is the one that we're experiencing at the moment. So this is the fourth capital rotation event in 100 years. It is a 100-year

chart there. And what we've got on the bottom is the stock markets the S&P 500. So what in other words, what did the stock market do when we had these capital rotation events? And you can see following the first one in in 1930, we had 25 years before um the stock market made a new high um and began to to move up to to new all-time highs. And then again in the 1970s, we had um eight years to make uh new highs. In fact, it was quite a bit more than that before it made new highs and and sort of reliably

held on to those highs. And then the more recent one in 2020, we had over a decade where the S&P 500, the US stock markets did not make new highs. So when we talk about capital rotation, it doesn't mean that there is no capital in the stock market. It doesn't even mean that the stock market isn't going up because during these capital rotation events, the stock market does go up. It'll fall maybe 50% over the course of a couple of years. And then what happens is that the stock market starts to grind

higher over the following several years and it takes lots of years to get back to where it originally was during which time the gold bull has already burst out of the gates and is outperforming the stock market by multiples. And I was going to say and that's even in nominal terms, right? So like taking 25 or eight or 12 years for the S&P to recover its previous level. That's expressed nominally. So when you account for inflation, you're really backwards if you're a stock. Yeah, I try. I mean,

there is a counterargument to that, of course, is that, you know, you get dividends from stocks as well. So, you know, I haven't done the math, but maybe it roughly balances out. But the point, and of course, we're not even talking about gold stocks here as well and silver because if gold is outperforming the S&P, then we know that on the recovery side, silver outperforms gold. So, gold might go up four or 500% on the recovery side, but silver will do a thousand% and the miners can do more

than that. So goes back to what we said before. Knowing what these capital, you know, what what point we're at in these capital flows is critically important and spotting the relationships between the stock market and precious metals and gold, which is the the barometer of all of this. That tells you, you know, where you should be putting your capital if you're investing over a period of a few years. Yeah. And it also helps you with your trades as well. This is the capital rotation indicator. If you're looking at this on

a small screen, you'll see a sort of matrix in the top lefthand corner there. And what's in those red boxes is money supply, which is in a bare market, US money supply versus gold. Uh DXY is in a bare market versus gold. Then we've got gold breaking out versus CPI, PPI, currency in circulation, the equal weighted S&P, NYA, which is the New York composite, the Dow Jones, the Wilshire, the Russell, and gold is breaking to a bull market versus the S&P and NASDAQ at the moment. And there's a little bit of

a caveat on that. It probably just needs to fall a little bit further to give ultimate confirmation. So you gota you got to always uh look at the evidence multip through multiple facets and you you'll see a recurring theme there is yes S&P we price in fiat but once we have a capital rotation event confirmed and the S&P and fiat enters a bare market you have to start pricing everything in gold because if you're in a capital rotation after capital rotation event gold's outperforming like

those those first charts we showed you gold is outperforming the stock market what's the use of comparing to the stock market What's the the use of comparing to to fiat? You got to take whatever instrument you want to invest in, whatever a minor, let's say weeden, price it in gold. Is Weeden outperforming gold? If so, you got all the tailwinds you want, less headwinds, and you'll have a higher chance of successfully having a good trade. And and that change of mindset is crucially

important because I think people are used to um looking at their stock and uh whatever it is they're thinking of buying and identifying if it's an outperformer. you know, is this stock that I'm thinking of buying, is it outperforming the S&P? And I think people are probably quite used to doing that, but what not what they're not used to doing is identifying, well, hang on a minute. Gold is outperforming the S&P in a 10-year gold bull era. So, everything that I'm contemplating putting in my

portfolio now needs to perform outperform not the S&P, but gold. So, on a ratio chart versus gold, it needs to be going bottom left to top right. If it's not, just buy or have exposure to gold or silver. Um, so it's that change of mindset. You know, you throughout your whole investment career, you only need those two things. Gold in the one hand, stock market in the other. And then what am I about to buy? Is it outperforming whichever of these two happens to be in a bull era? And that is

the that's the resetta stone to uh long-term investing. Yeah, I like that a lot. And that's actually the the way I learned that lesson was actually from studying Bitcoin actually both those lessons speaking of confirmation bias and finding the right benchmark is like the whole the whole Bitcoin journey for me has uh like helped with so many of the things that you're talking about like trying to prove myself wrong and just trying to prove myself wrong with every theory I had and then I did that

dozens and dozens of times and that's actually how I came to believe in Bitcoin is from thinking that it you know wastes energy all these other criticisms right um and then in terms of finding the right benchmark Mark, I I was interested in altcoins and then I realized after a few years I was like, wait a minute, you know, this altcoin is doing 10% on average or whatever it is, but it's underperforming Bitcoin. So that's how I started to think like, okay, I I shouldn't be measuring my

portfolio in dollars. It doesn't it doesn't make any sense. I have to, you know, pick whatever the best performing asset is at any given time. And so then I moved into gold, thinking, okay, what's my what's my net worth measured in ounces of gold and am I outperforming what gold is doing? Um, and I think that's a that's a big important shift for people to make, but it it's tough to get there. Um, yeah, using using things like the gold silver ratio is analogous to using the uh Bitcoin dominance chart.

I mean, Bitcoin dominance is representing market share of Bitcoin and gold, the gold silver ratio is uh representing the strength of gold versus silver in a gold bull market. So you these ratio charts they might scare people a little bit and they might look at a ratio chart and try and sort of you know be bit scared by not understanding what it means but here we've got a ratio chart of Bitcoin versus gold. Now clear your mind of all bias okay because the bias ain't going to get you anywhere.

We've got the 50week moving average and we've got the Ishimuka cloud on there and the Bitcoin versus gold chart has fallen below the 50WE moving average and it's fallen below a support line that goes back to 2013. So that should set some alarm bells ringing no matter what your you know bias one way or the other for gold and Bitcoin. So, we now know that for Bitcoin to regain its um bull run versus gold and for Bitcoin to be preferable to have your money in to gold, you should be getting above that

moving average and above that broken support line. If it can do that, then it should go much higher. Don't mean Bitcoin has fallen something like 38% versus gold since it hit that barrier. It's all about time frame. You got to you got to really see the time frame. Now, objectively that that chart is below uh that moving average. So, it's in a downtrend as defined by that moving average, but it's also gone sideways since 2021. So, you could also say yes, it were bull and bare cycles since 2021

for gold versus Bitcoin, but it's it hasn't outperformed gold since 2021. It hasn't gone above those highs. It hasn't. So, the momentum right now, it's flat right now. It's when the aggregate of market participants realize that it's not going to be a random five or 10% correction for the S&P. It's going down 30 40 50. That's it's that mindset switch that happens and then there's a recession that's uh in hindsight that they they backfill. That's what the CR

is. It's that paradigm shift type of event. So CR in the 2000s SPX drops 50% price in fiat. Uh is it? Yeah, price in fiat, then another drop. It can't it can't get any traction for 10 years. But look, I overlay Bitcoin chart. The es and flow of Bitcoin tracks practically the the S&P. Of course, it's outperforming SPX drastically during that period, but it tracks from bottom left to top right, it tracks the S&P. So, if we think we're going to enter, if you're pro gold and

you think the CR is is going to happen and gold is going to outperform S&P for the next 10 years, what do you think is going to happen to to to Bitcoin here? You think it's going to double, triple, disconnect? That's not like playing the probabilities, right? It had 15 years to to disconnect, guys. It had 15 years to do it. It hasn't done it so far. So, the burden of proof is on Bitcoin, but people think it's going to dislocate from uh from the NASDAQ. The Bruno proof is on Bitcoin, but it's as chart

traders, you're playing the evidence and the odds. You're playing correlations, not causation. You're playing current correlations, right? And you have to accept that a correlation that long has a higher chance of continuing than not continuing, right? It's like assuming all market participants are wrong, right? And you're right. It's like there's a lot of money there flushing out there, guys. You got to respect how the market is carving out the price charts. And it's it's it's going to be

tough, right? doesn't mean Bitcoin could do great on the recovery cycles, but it shouldn't have as much traction as it previously did in a bull era for the stock market. Did you I'm sorry. Like I know I'm going to get hate for this and but I try to show people this because nobody's everybody looks at Bitcoin inception but they don't realize that these cycles like all the noobs sorry even like how many traders have seen the 2001 rollover like I was barely understanding what was

happening there and I remember back in 2001 a whole I was starting my IT career a whole bunch of people were about to retire. I remember these guys making a whole bunch of money in the stock market and they're probably hopefully they're not working today, but they didn't understand that there was a capital rotation event and the stocks were getting their the rug pulls. It's it's tricky. You know, you got to you got to look at the big picture, guys. And big picture is that gold to SPX chart. This

this is global liquidity uh money supply uh rising. Now, I've heard a lot, we've all heard a lot recently that oh, you know, global liquid global liquidity is about to go bonkers. um rates, you know, the Fed are going to bring rates down. Well, neither of those things stops the stock market falling. If you look back at the Fed funds rate, which is another chart we want, you know, we could bring a million charts up, but when the Fed funds when the a cutting cycle, a rate cutting cycle is in

progress, oftent times the stock market falls. I know there's this narrative that it it goes up, but that's not the case. And this this is another um sort of narrative that we need to sort of dispel. Really rising global liquidity does not stop you having 16 15 lost years or a decade lost in the stock market. It's not a case of oh liquidity is rising so therefore stock markets and bitcoin are go going to go bonkers. It's a case of okay there's more liquidity being pumped into the system but where

the heck is it going? And that's where the capital rotation event comes in. Is it going disproportionately over there or is it going disproportionately over there? I mean, we haven't even spoken about the bond markets either. I mean, I think probably everybody is expecting um, you know, 10-year yields to be down at one and a half 2% at the moment and they're, you know, proving to be in, you know, very very resilient. It's because we've had a paradigm shift. This this guys I I know Kevin talked about global

liquidity but this is the chart where I found which tracks best uh these capital rotation events the capital rotation process and often guys you'll notice from charts that go from bottom left to top right and people say ah the debt's crazy look at that in 1966 the this is a total public debt this is the government debt it's uh the money has to borrow the programs it's everything the government borrows 319 billion in 1966 today 35 trill maybe more there by the time this gets updated. And people's ah the debt

the debt and then they they they go into gold and all that. That's not just a reason why you should do it. Look at the bottom. The bottom is the distance from uh the six quarter moving average. So again, like you saw in the other charts, I'm looking at the change, the accelerations and decelerations in that debt creation. And that's what the market participants react to. And those green overlay lines, guys, those are recessions. And check it out. When the momentum as defined by the distance from

moving average, the the the debt accelerating faster because it's practically always going up, goes upwards, guess what's happening? Stimulus programs, a whole bunch of stuff. Recession, bang, 1970, 1974, bang, recession. Uh 1979 or 80 recession, 81, 82, recession, 90 recession, 2001 recession, 2008 recession, 2020 recession. every single time you have an acceleration in uh total government uh debt, public debt. And guess where we are now? It's not stretched to the upside. Often the gold

bull eras, they end when the debt has already exploded and it starts unwinding. Look from the 1982 top all the way to the 2002 bottom and the debt debt would kept going up, guys. But that unwind in momentum, that was the crazy bull era for stocks, right? 1982 to all the way to 2001. But now we're flat. And if that line there where I wrote recession is more likely above this line and then I have gold, silver, oil, miners outperform above that line and I have S&P, NASDAQ, Bitcoin underperforms

above here. Well, the evidence has shown me this is the the logical road map. As soon as we start closing above that line and the government starts uh taking on more debt, it's a it's more evidence that the CR is upon us and we're in a gold and silver bull era. analogy for that, you know, you could imagine the car going forwards at um I don't know 50 miles an hour, 60 miles an hour, and that's the debt, you know, constantly increasing. Put a cup of coffee on the dash of your car. And if

you suddenly hit the accelerator, the coffee falls over. Well, the coffee falling over is the capital rotation event. It's when the accelerator is slammed on or the brakes are slammed on, it causes this event to happen within the vehicle. And that's um and that's what you know that's how we can better identify these turning points. It almost seems like Trump is pushing both pedals. He's pushing the gas and the brakes. He's like, you know, let's slash government spending, but he's probably

going to have to take on a whole lot more debt and spend. So Alan, he's a symptom. He's a symptom. Look, these charts there. Gold broke out in June of 2019. It's like it's it's a it's a macro cycle already in motion. It's like I don't want itself I don't want to say it's guaranteed to happen but the it's everything's been building up to that. It just happens that you know like the dot uh whatever the GFC it might be the Trump tariffs this time like of course as humans we're going to

want to rationalize this and and put a headline like on top of that right so like yeah it's Trump is less I don't know I think he's just he's just a symptom to all of this there. Yeah, I agree. Some some friends of mine asked me, you know, who are you voting for in not even the most recent election, it was even prior, and it's like, you know, I said, I wouldn't wish the next presidency on my worst enemy. That's right. Because, you know, the the economic landscape is so bad that

whoever, you know, the next president is at any given time, it's like they're going to get blamed for like a horrible, horrible crisis that that isn't their fault that's been decades in the making. So, I agree. Trump is a symptom of of these underlying structural issues. Yeah, decade decades in the making from parties on on both sides of the aisle. It's um it's been a long road to where we are now. And it's sometimes referred to as the fourth turning. Um you get these um huge events that come along um

probably once in every human lifetime. But it's uh yeah, there's a lot a lot of factors that have to come together and you can't pin it on any one particular person at any one particular point. You know what the common denominator is, Kevin? Okay, I don't want to go conspiracy there, but the Fed or the government, the Fed and the government have always been there since since these cycles we've been observing them, right? They're the common element in all of this. Fiat. Yeah. Yeah. And talking about

that, we've got the gold chart there coming up coming up next. And the gold chart actually delivered a serious warning signal um a couple of times relatively recently. Actually, we broke out uh from that cup and handle pattern there back in uh was 20 late 2023, I think it was, and we broke above the 2000 level. Um and then we more recently broke out through that um through that 44 uh year resistance line, the red line on the uh on the chart there. We got that breakout just a little while back.

And um that's a a major signal. You know, these are major resistance lines that we're breaking out of on the on the gold chart. And when gold breaks out strongly above multi not just multi-year, but multi-deade resistance lines, it can be seen as something of a of a warning really. It's it's telling us in a way that something just isn't quite right, particularly when it does it so so dramatically there. You can look at gold versus PPI, gold versus CPI, all these other capital rotation um

indicators. And so what's happening at the moment is gold is stretching way above its moving averages. Okay, we are well stretched above the three-year moving average to a historic degree. Okay, so what that tells us is that in all probability, gold is seeking out a a pretty major top here. It could be anywhere between here and you know there's a theoretical stretch target there anywhere between about 35 and 3,700. Whether we have enough time to get to that point depends a lot on the stock market because if the stock market

begins to move upwards strongly and breaks out into a into a meltup scenario then it's risk on and uh gold sells off. If the stock market breaks down below the uh critical support line that's not much lower than current prices then I think there'd be a bit of a panic uh and again uh gold and precious metals would sell off. Now, this is um normal because we're very stretched from the three-year moving average. So, we want and we need the sentiment to reset to power gold higher. And you can see a a road map

there where gold uh does roll over at some point in the next few weeks probably and comes back down to perhaps just an estimation, but perhaps somewhere around 27 2,800. That would be an opportunity for stuckers in particular. Uh, in fact, anything below $3,000, however brief it might be, is um likely an opportunity. And as we are um in a position to say that couple rotation event um evidence is as strong as it is, then the high probabilities are that gold would uh then recover from that. uh particularly after um stock markets

bottom or as we move towards a stock market bottom um gold and silver would start to move up and silver in particular would outperform. So there's a road map there to um5 $6,000 pull back and then move up towards 8 to12,000 and I think an $8 to 12,000 target you know within the next sort of five to eight years isn't um isn't unreasonable. Yeah, it's it's guys, we're we're pricing stuff in in fiat. They're just adding zeros, like you know, and nothing's going to break, guys. As like people,

oh, it's going to break. No, we had gold at $25. We had gold at $200. We had gold at $1,000, at 2,000. Nothing breaks as long as it doesn't go up too fast. It's like it's not the end of the world. They're just that's how that's how they're destroying your purchasing power. But Ke Kevin touched a good point there. Gold and silver, people want to know when when are they going to start outperforming? And this is a a chart there. It's the gold to silver chart. This chart

exemplifies when what how how does silver behave when the silver have its best runs. So silver starts outperforming gold when the stock markets start recovering from a severe draw down. Remember I said destruction of purchasing power required to save the US equities. Silver loves that. Uh did that in 1975. It did that in 1982. I think it did it halfway in 19 uh halfway through that bull era in the 1970s. Look at 2002, the stock market went down 50%. Exactly when the stock market started going back up, silver started

outperforming gold. And guess what? Silver outperformed gold pretty much during that whole run for that 10 years except the GFC where there was another reset where silver got dragged down versus gold. But look at that the exact bottom 2009, silver starts outperforming gold and it outperformed practically everything. I did I went through a whole bunch of charts Allan trying to figure out what outperforms silver there's not much maybe chemico a few uranium like silver if you're out if you're beating

gold in the precious metals bull era there's practically nothing that's going to beat silver in the major asset classes of course I could find some occult uh micro cap there's always stuff breaking out like outperforming but in the major big boys silver is a great play after the stock market's bottom so CR event And the harder the S&P corrects, if it goes on in a 50% bare market haircut, my goodness, as soon as the market's bottom, silver probably nominally is already start going up

before the market's bottom. But its best years, its best performance, it's it's, you know, lock limit days are like always going higher and higher and higher. They're after the market's bottom, not before. And and we're in a great position to start seeing that happening because the gold silver ratio is already pretty high. It's up near 100 somewhere. Now, you know, you can you can imagine in your mind a scenario where we do have this correction for the precious metals and therefore in a

correction in precious metals at the moment, you know that silver is going to get hit hardest. So, what's that going to do? It's going to put the gold to silver ratio higher. This chart that we're looking at now is the silver to gold ratio. So, what it's going to do is push it lower. So, this ratio chart that you're looking at on the screen now is going to dip even lower. What does that do? Well, it sets you up even better for a, you know, I was don't hesitate to use the word violent, but a rapid large

upside move in the silver to gold ratio. So, yes, silver has been going up. It's gone up from, you know, $15 to where we are today, over $30. Silver still goes up even when it's not outperforming gold. But it's it's glory days. They come when the stock market has bottomed as Pat said. So wait for the S&P to fall 40 50% and then you know right I'm going straight into silver because it's going to go up a thousand%. And those and those eras that you flagged in that chart there where silver does outperform

gold they it looked like they ranged anywhere from two to five years where silver outperforms gold each time. Is that about right? Yes. Well yeah so 2003 all the way to 2007 about that before the GFC and after that it had another one. So those are halfway cycles are you know yeah it could be that run at the end of the day we're just going to look at the charts but yeah it's going to run hard it's going to like Kevin like saying it's going to double double again and double again each of those runs Allan there

silver went up about 400%. So that's that's 400% in five years. Another 400% in five years, but using charts, you don't have to hold through a GFC event, right? You you could try to exit there and then get back after the market's bottom. So the target that we've um you know been showing since this chart went up 5 years ago is well, you can see where the target area is in time and price. It's it's that uh um 38 to 50 zone. Once silver spikes above um 32 and then 35, you know, your guess is

as good as mine as to exactly where it'll stop. It could be 40, it could be 50, it could overshoot and go to 60. You know how spiky silver is when it gets into one of these moves. But that is um just the beginning of the journey because from that point a correction would be likely and then that's when you accelerate. So after after um stock market's bottom, you're going to be powering way way past that target area and on up to $100 plus uh without even batting an eyelid. Wow. Amazing. Well, that's probably a

good place to end it with a little forecast for gold and silver. So Kevin Patrick, thank you guys so much for being here. I really appreciate it. Um if people want to follow your work, uh where's the best place? Yeah, you can find us at Northstarbadcharts.com. Uh we've both got X accounts as well. Mine is uh Northstar Charts and Bad Charts One. Bad Charts One. Awesome. Again, thank you guys for being here. Really appreciate it. Thank you, sir. Cheers. [Music]