well it doesn't necessarily mean that
it just means that an ounce of gold is very likely to be a good store of wealth going forward and will buy you more dow
as it has been for the past decade or so where dow has been flat to down...and gold has gone from 300 to 1200
there's the potential of say gold prices going no where from here and dow prices totally collapsing to shrink the dow/gold ratio...but at the end of the day gold is still a great investment and store of value in that situation as your gold can now buy you much more equities than it could in the past....
but yes if i had to guess the general trend we've seen since 2000 will continue lookin at the long term picture taking out all the noise of volatility
dow sideways and gold up...till we reach at least 3/1 dow/gold to the downside...ratio currenty stands at 8.84
it just means that an ounce of gold is very likely to be a good store of wealth going forward and will buy you more dow
as it has been for the past decade or so where dow has been flat to down...and gold has gone from 300 to 1200
there's the potential of say gold prices going no where from here and dow prices totally collapsing to shrink the dow/gold ratio...but at the end of the day gold is still a great investment and store of value in that situation as your gold can now buy you much more equities than it could in the past....
but yes if i had to guess the general trend we've seen since 2000 will continue lookin at the long term picture taking out all the noise of volatility
dow sideways and gold up...till we reach at least 3/1 dow/gold to the downside...ratio currenty stands at 8.84
I know the bellweather number is to follow the Dow but I myself like the S&P 500 number. It is much easier to follow a 100 pt. move than a 1000 pt. move and they both move within the same %'s. Sticking with my original correlation using this chart it almost looks like the stockside staying flat or downside and gold continuing upside and maybe 1400 soon. Big day for gold today.
yeah S&P better to follow than dow...just all you can really find are dow/gold charts not S&P/gold....
but the take home message like i said above is holding gold instead of equities for the long term should continue to pay dividends regardless if gold goes up in value or not....
as its going to buy you more equities down the road
at this point i see it hard to envision say a dow 4k, gold 1333 scenerio or something like that....hyperdeflation scenerio....
probably looking at something more like dow 8k gold 2.66k....
or something to reach dow/gold 3/1
the hyperinflationist believers would say dow 15k and gold 5k type stuff
but the take home message like i said above is holding gold instead of equities for the long term should continue to pay dividends regardless if gold goes up in value or not....
as its going to buy you more equities down the road
at this point i see it hard to envision say a dow 4k, gold 1333 scenerio or something like that....hyperdeflation scenerio....
probably looking at something more like dow 8k gold 2.66k....
or something to reach dow/gold 3/1
the hyperinflationist believers would say dow 15k and gold 5k type stuff
and chances are you will see some sort of parabolic spike in gold prices at the climax (low point for the dow/gold ratio however low it may go for this cycle) marking the end of the gold bull
that day is still many years away though
until dow/gold gets 4 or lower...i'm not even thinking about looking for a top to the long term bull in gold....
that day is still many years away though
until dow/gold gets 4 or lower...i'm not even thinking about looking for a top to the long term bull in gold....
