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Dow/Gold Ratio Is Dropping Like A Rock

2 August 2011 14 Comments

Amazing action in the markets right now. The Dow ended the day today down 260ish and meanwhile gold spiked above $1650/oz. Put them together and you have a crashing dow/gold ratio. I’ve been saying for years that this is going to head lower. You have to watch the price of gold in the new era of printing money. It shows whether or not the bull run in stocks is legitimate or just a easy money result. I’d say that it’s showing to be the latter. The Dow/Gold ratio is approaching the March 2009 lows very rapidly. If it breaks below 7, then we’re under the lows of March 2009.  See chart below:


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    Care to note any of these jumps in assumptions? Point out any of the breaks? We would all be fascinated!
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