ping
I guess if we are cherry-picking start points and end points:
Let’s pick around the day I graduated College: June 10, 1981:
Dow Jones: 993.88
Gold: $465.25
Today: DJIA: 14397
Gold: $1,578.50
So, stocks increased 13.48 times.
Gold increased 2.39 times.
Note: That isn’t Gold’s peak (which was 819), nor is it DJIA low (which was close to 25% lower)
So, when I graduated College, if I put all my money in stocks, I did much better than if I put all my money in gold. If I had any money.
If when the economy crashed by 2009, and Obama got elected, I would have panicked, and sold all my stocks and bought gold, I’d have about doubled my money either way.
Gold/Silver vs Dow
bfl
Bump for later.
Goldbug ping.
This article implies relationships that aren’t actually all that predictive. 1980 blows the whole notion out of the water.
IMHO the trend line for gold is presently below reality. Were it not for the downward slope from the unsustainable peak the trend line would be higher than the present.
I think it should be at $1900 or $2000, that is greater then the present $1600.
Then there is the gold/silver ratio. The ratio was stated at ~54. Historically, for a very longtime the reatio was closer to 15. If the price of gold is correct, Silver has a ways to go before topping out. The author cites correlation at 54 but historic correlation is much lower.
Wages are lagging because of the unemployment. The disparity will decrease with the coming wage inflation.
Unstated was that as the price of gold in vaults rises, so does the price of the gold in the ground. A basket of mining stocks in a mutual fund is buying gold in the ground.