Saturday, October 4, 2008
The Dow-Gold 1-to-1 ratio is a given during this cycle
As most acknowledge, we are entering a  period not unlike the recession of the late 70's and potentially more severe.  Going back 40 years further, you had the great depression and then a similar recession occurred in the late 1890's.  Notice how these unsettling periods occur every 40 years (1890's, 1930's, 1970's, 2010) During these periods, the Dow-Gold ratio made it's way to 1-to-1 before the Dow recovered.  It doesn't take a rocket scientist to see that gold needs to move up dramatically in the not too distant future.  If the Dow drops 50% from here to 5,000, gold will move up over 500%.  If the Dow maintains its present level, gold will move up over 1,000%.  Hard to believe?  If the past is any indication of the future, it's time to prepare.
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