Gold vs Dow

From Chart of the Day:
For some perspective on the current rally that began back on March 9th, today's chart presents the Dow divided by the price of one ounce of gold. This results in what is referred to as the Dow / gold ratio or the cost of the Dow in ounces of gold. For example, it currently takes 9.7 ounces of gold to “buy the Dow.” This is considerably less (78% less) than the 44.8 ounces it took to buy the Dow back in 1999. Since 2007, the Dow / gold ratio has declined at an accelerated pace (see dashed lines). As a result of the recent rally, the Dow (priced in gold) has moved up significantly and is currently testing resistance of its accelerated downtrend.

Comments:

A few thoughts on gold and stocks, specifically, the Dow.

When times of great financial stress come to pass, the Dow Gold ratio often plunges.

In the early 1980s, the price of Gold reached $1000 and the Dow 1000 points - A ratio of 1:1.

If we have another great shock to the system, which I believe is likely, spot Gold at $5,000 or $10,000 would be possible.

Alternatively, the Dow could drop as low as 2000 points.

Hence, my bearish view of stocks in general and US stocks in particular.