via Google Search - Financial Post, Dec 7, 1974

I didn't manage to find any excellent archival material for the 1973/74 bear market as regards gold mining companies, which is a close comparison with the present, if you care to draw an analogy, but there is one subject which got all of the attention, and that is the oil sector.

Not only are there charts with which to compare the present, the similarities are very apparent. In the 1970's you had oil price fixes and governmental regulation. Nowadays, bituminous oil does not fetch a premium; this is very much like a price control weighing heavily on Canadian producers.

But royalties and taxes served to stanch development. You can also draw an analogy with oil industry of the time, and larger gold producers at present.

Lenders such as Sprott Resources(which was bought back by Sprott Asset Management) are adding to the problems of resource development by attaching the kind of usurious interest rates you find in a ponzi scheme, along with the increase of taxes in the resource sector. Those taxes will only increase, and Sprott's 'vision' of compensating for chimeric inflation is troubling. Bernie Madoff only promised 8%.

The charts here are over a shorter period, but look very similar to the run-up in oil prices, the correction in 2007, and then averaging out at a higher price before entering a bear market in 1973/74.

Gold miners did well during this particular bear market period, but I do not draw any similarity with the gold bull market of the 1970's. The oil bull market is very easy to point out, and it has since passed. The gold bull market still has one leg to complete.

http://ow.ly/r88g3

http://scharts.co/1hb656L

-F6