Quote of the Day
"The modern mind dislikes gold because it blurts out unpleasant truths." - Joseph Schumpeter
The relative movement of gold to stocks continues to indicate a downtrend in the Dow to Gold ratio. As we note from the chart, the Dow peaked in the area of 44 to 45 ounces of gold to buy the Dow in 1999 - 2000. Now, in this time of extremely low, accomodative interest rates, it only takes 9 ounces of gold. If history is any indicator, we can expect to see the ratio bottom out in the range of 1 or 2 ounces to buy the Dow.
So what will happen?
Will stocks drop sharply and gold remain relatively flat?
Or will stock drop modestly or even move sideways and gold skyrocket to four or five times its current value?