Re: [RT] The Gold Thread

["Stig O" <olausson@xxxxxxxxxx>]

Hi all,
Just picked up this somewhere.
 
stig
 
The Dow/Gold Ratio
Below is a long-term chart of the Dow/Gold ratio. The source of the chart is 
Fred's Intelligent Bear Site ( <A 
href="http://freeweb.pdq.net/filskov/";>http://freeweb.pdq.net/filskov/ )
<IMG alt=" " border=0 height=405 
src="http://www.gold-eagle.com/gold_digest_01/images/milhouse052101.gif"; 
width=595>

  There are a couple of things worth noting with regard to this chart. 
  Firstly, the ratio moves in a well-defined channel (although it did overshoot 
  on the downside in 1980). Secondly, each of the prior two occasions on which 
  the channel top was reached was followed by a decline to the channel bottom. 
  If the same thing happens this time, the Dow/Gold ratio will drop to about 5:1 
  over the next several years.
  The chart doesn't tell us anything about the next 12 months, but does 
  strongly suggest that July-1999 represented a long-term high in the Dow/Gold 
  ratio (July of 1999 most likely gave us the secular peak for the Dow in terms 
  of hard money, although it went on to achieve higher levels in terms of US 
  Dollars). This means that the major trend has most likely reversed lower and 
  that gold bulls, having spent 20 years on the wrong side of a major trend, are 
  now on the right side.
  Steve SavilleHong Kong21 May 
2001






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