Thread: the gold DOW ratio!

It has been said that the gold DOW ratio had gone all the way down to 1 : 1 twice during economic crisis. In the 1930's and again in the 70's.......I have said many times that its only a matter of time before the ratio will once again get close to that 1: 1 ratio or at least close to it.

As of today its down to 7.5 to 1.....thats a drop from around 40 to 1 during the hey day of the stock market boom. But it has slowly been losing ground to gold ever since Greenspan dropped interst rates back in 2001.

Although it may not hit exactly 1 : 1, I am willing to bet it will get close, lets say to 2 : 1....or there abouts.

So what do you think?

I find it interesting that the only currency with "SOME" gold backing is really on a tear now!

Originally Posted by bacardi

It has been said that the gold DOW ratio had gone all the way down to 1 : 1 twice during economic crisis. In the 1930's and again in the 70's.......I have said many times that its only a matter of time before the ratio will once again get close to that 1: 1 ratio or at least close to it.

As of today its down to 7.5 to 1.....thats a drop from around 40 to 1 during the hey day of the stock market boom. But it has slowly been losing ground to gold ever since Greenspan dropped interst rates back in 2001.

Although it may not hit exactly 1 : 1, I am willing to bet it will get close, lets say to 2 : 1....or there abouts.

So what do you think?

It's hard for me to say...you might be right (I sincerely hope you are).

But, I assume the government/Fed is going to keep pumping trillions and trillions of dollars into the stock market to keep it artificially pumped up - whether directly or indirectly through inflationary 'money printing'.
So I do not know how high/low the DOW will go.

I do think that based on what governments/central banks have done - I would be surprised if gold does not go to at least $2,500-$3,000/ounce and silver to at least $100/ounce before they finally come to their senses and start to fight the inflation/monetary instability they seem to crave - yet publicly deny exists and/or is in danger of existing.

Originally Posted by DA60

It's hard for me to say...you might be right (I sincerely hope you are).

But, I assume the government/Fed is going to keep pumping trillions and trillions of dollars into the stock market to keep it artificially pumped up - whether directly or indirectly through inflationary 'money printing'.
So I do not know how high/low the DOW will go.

I do think that based on what governments/central banks have done - I would be surprised if gold does not go to at least $2,500-$3,000/ounce and silver to at least $100/ounce before they finally come to their senses and start to fight the inflation/monetary instability they seem to crave - yet publicly deny exists and/or is in danger of existing.

those two ( gold and DOW ) shall meet, but we dont know at what price.....will it be DOW 15,000 gold 15,000 or will it be DOW 10,000 gold 10,000 is anybodies guess.

And like you said.....the fed is pumping trillions in the market to prevent it from falling, this assures an even higher gold price.....my guess is it can easily hit 4,000 assuming no major event takes place. Now if there are some major defaults then all bets are off.....even 10,000 is possible in a possible US default.

if as you say they eventually come to their sences then this will be when the spectacular collapse takes place. It shall be interesting to see if the fed can handle half the banks failing!

Originally Posted by bacardi

those two ( gold and DOW ) shall meet, but we dont know at what price.....will it be DOW 15,000 gold 15,000 or will it be DOW 10,000 gold 10,000 is anybodies guess.

And like you said.....the fed is pumping trillions in the market to prevent it from falling, this assures an even higher gold price.....my guess is it can easily hit 4,000 assuming no major event takes place. Now if there are some major defaults then all bets are off.....even 10,000 is possible in a possible US default.

Originally Posted by bacardi

if as you say they eventually come to their sences then this will be when the spectacular collapse takes place. It shall be interesting to see if the fed can handle half the banks failing!

I agree with what you are typing.

It's so weird that when I sell or not is based at least partially on what some guy whom I have virtually no macro-economic respect thinks and does...Ben Bernanke.

As long as he (and other central banks and governments) keep pretending inflation does not exist - I keep my gold/silver.

As soon as they start to really fight inflation/excessive 'money printing' - I get out as fast as I can.

Intense. Fun, but intense.

Originally Posted by bacardi

It has been said that the gold DOW ratio had gone all the way down to 1 : 1 twice during economic crisis. In the 1930's and again in the 70's.......I have said many times that its only a matter of time before the ratio will once again get close to that 1: 1 ratio or at least close to it.

As of today its down to 7.5 to 1.....thats a drop from around 40 to 1 during the hey day of the stock market boom. But it has slowly been losing ground to gold ever since Greenspan dropped interst rates back in 2001.

Although it may not hit exactly 1 : 1, I am willing to bet it will get close, lets say to 2 : 1....or there abouts.

So what do you think?

When?

...................

Originally Posted by Iriemon

When?

...................

you already know my answer to that...when the currency crisis hits....sometime in either 2012 or 2013

Originally Posted by DA60

I agree with what you are typing.

It's so weird that when I sell or not is based at least partially on what some guy whom I have virtually no macro-economic respect thinks and does...Ben Bernanke.

As long as he (and other central banks and governments) keep pretending inflation does not exist - I keep my gold/silver.

As soon as they start to really fight inflation/excessive 'money printing' - I get out as fast as I can.

Intense. Fun, but intense.

perhaps we should take up golfing....then maybe we can run into Bernacke and learn what his next move will be

how about a gold silver ratio?