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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