Claim
Frank: at the beginning of capital rotation events, gold and the S&P 500 rise together — the regime switch starts with both bid, before they diverge. Examples he gives: the 2000s (gold bull coexisting with mid-2000s equity highs), and gold breaking its peg around the London Gold Pool collapse (record says March 1968; Frank said “late 1968” — date to verify) while the SPX was at all-time highs (“imagine if there was no peg how it would have been screaming”).
origin: frank— recorded faithfully; independently re-research before use.- Why it might be true: rotation onsets are usually liquidity/reflation events (the thing capital rotates OUT of — cash, bonds, a pegged FX regime — is what both assets are priced against); early in the shift both nominal assets bid together before relative-strength regimes sort them out.
- Why to be skeptical: post-hoc window picking; “beginning of a rotation event” is a label applied after the fact, so the test needs a forward-looking definition (e.g. months where BOTH assets break their own 12-month highs within the same quarter) rather than pre-chosen episodes.
- Test (to propose): forward-looking screen 1971+: months where both assets post trailing-3-mo highs simultaneously; measure how often gold-only, SPX-only, and both rise over the following 6/12 months, and quantify the tax a one-of-two gold-spx-rs-ratio-rotation rule pays in co-move months vs holding both. This is the direct test of whether relative momentum gives up the first leg of every regime shift.