A Golden Reflection


Today's Quote:

"Gold will be around, gold will be money when the dollar and the euro and the yuan and the ringgitt are mere memories." - Richard Russell

Comments:

Based on historical data, the Dow to gold ratio should reach the 2:1 or 1:1 level if we are indeed in a bear market.

Comments

  1. AnonymousNovember 12, 2010 at 9:56 AM

    IF Dow/Gold ratio goes to 2:1 or 1:1, then what is the determing factor? Is the price of gold going to go up, or is the price of the Dow going to drop? Or even both happen at the same time? So far I see no downside in owning gold.

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  2. PW BaileyNovember 13, 2010 at 7:58 AM

    I will answer this question in detail in a future blog post over the next couple of days. The primary determining factor appears to be the presence of deflationary pressures as historical records from the 1930s and 1870s show.

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