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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: gregor_us who wrote (89186)	7/29/2009 12:11:44 AM
From: Real Man	Read Replies (5) \| Respond to of 94695

Convergence between DOW and gold, as you call it, will result in a pretty nasty economic environment. Please, note that DOW/gold ratio has declined from about 43 in 1999 to about 10 at present. It was as low as 7 back in the Fall of 2008, so we bounced some. If you think things are bad now, think again. Yes, excessive use of the printing press and abandonment of gold standard resulted in DOW/gold ratio making a new low in about 1980, below its prior secular low of 1932. Given the monster credit bubble that we've seen, we could even break that low. It's actually a broadening pattern on a 100 year scale. So, if the DOW could go negative, the target would be -42. <GGG> This makes little sense, so we use a log. That way the target would be a 98% decline, from DOW/gold = 1, or gold/DOW ratio of 43. That environment would be very Zimbabweish, as that country is now dead last in the World economically <G>