The Epic American Credit and Bond Bubble Laboratory Message Board

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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: Enigma who wrote (15607)	6/21/2004 11:57:36 AM
From: jimsioi	Read Replies (1) of 110194

Enigma, thanks for GG report & Gold / Indu This chart is a monthly chart of the relationship between gold and the INDU...The Dow Jones now sells for 25 or so times the price of GOLD....and has more or less for a number of years...down from numbers in the 40s ... stockcharts.com[h,a]macaynay[d19900621,20040621][pf][J6424864,Y]&pref=G The ratio peaked in 1980 at roughly one to one and has never been back, climbing through the 90s, peaking in 2000... Frankly I think its a bit of an error to think that history will so neatly recycle itself. The value of the companies in the DOW Jones due to the massive spurt in technology in the last decade and their respective earnings power I suspect will keep those companies even at the depth of a valuation depression worth more in gold than they were in 1980...But who knows... A ten to one ratio is my pick for a guess which is only what ever one's else is .... 7500 DOW and $750 gold...three years out.... Because once upon a time a ratio was one thing does not mean it will be again...Maybe 25 holds and we see 25K DOW and $1000 Gold during an inflation that boosts earnings in dollar terms while PEs don't fall much... There had been rumors that "GG's mine exploration programme had found much more gold - vertically but also laterally - with mind boggling grades.." At this point in time the market is ignoring this news. Eventually I'm betting in GG's case fortunes will recyle around again and it will be appreciated. Thanks for the report

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