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Most Important Chart For Next Few Years?

5 May 2011 2 Comments

I’ve put up versions of thie chart before, but this one goes further back and is pretty clear.  I like it a lot.

Dow Jones / Gold ChartI very much believe we’re going to head at least closer to the 1 to 1 ratio as shown in this chart.  This means that either the Dow is going way lower or gold is going way higher.  Probably a bit of both, no?

We might not hit a 1 to 1 ratio, but I bet we hit at least a 3 to 1 ratio or somewhere around there.  I think the fundamentals are definitely in place to at least make an approach.

There will be a moment when you should absolutely sell gold and buy stocks, but I don’t think we’re there yet at all.

We’ll continue to put this chart up here on this site as we watch this unfold.


  • The Dividend Ninja said:

    It will be interesting to look back on this in a year or two and see how this unfolded 😉 Predicting markets isn't something I'm into – but I do see your chart is indicative of inflationary trends, and deflationary periods.

  • High on Dividends said:

    Very interesting, but only in a general way.
    Why? If the tops are getting higher, maybe the lows will be higher also. You can not extrapolate anything concrete from such few data points. Statistically insignificant. You can only be sure that there is a general trend.