Index In Real Money/Gold
Updated February 5, 2020 - Bearish Flag for the Dow expressed in Gold - A crash and a solid down trend we have: resuming bear trend now!
The charts below speak and tell us that the Gold & Silver sector will perform BETTER than the traditional Stock markets will!
Dow in Gold lost 40% in 2009 and 80% since 2001!
"What sense does it make to accumulate Fiat Money (Treasuries & bank deposits) which are slowly but surely becoming worthless..."
Charts (except China and Japan showing a fresh break down) all look similar and are extremely Bearish.
|The best way to measure the Dow in real terms is against gold. Gold is the only money which has survived in the last 5,000 years – furthermore, GOLD represents stable purchasing power. Over time gold doesn’t go up. Instead, it is paper or fiat money that goes down until it reaches zero.|
These PF-charts are the answer to an important question and show what the REALITY looks like!
One of the best ways to gain some perspective on stock markets and gold is to look at the Dow Jones Industrials (DJI)/Gold ratio. The Dow/Gold ratio has a long history as the 200-year chart above attests to. The ratio has had considerable movement over the years, which is an accomplishment in itself since gold was until August 1971 fixed first roughly at $20.67 and then at $35 in April 1933 when the Roosevelt administration revalued gold up in order to devalue the US$.
The devaluation of the US$ was a part of the currency wars of the 1930s. The Roosevelt administration also forbid the hoarding of gold, gold bullion and gold certificates and gold was purchased by the US administration at the then fixed rate of $20.67. The resulting profit was used to fund the Exchange Stabilization Fund (ESF) a fund that was established by the Gold Reserve Act of 1934. One thing that stands out with the above chart is that following the creation of the Fed in 1913 the Dow/Gold ratio has become a lot more volatile.
When the Dow/Gold ratio reaches 1:1 this means a loss of more than 90% in real terms for stock market investors – $ 1 million in stocks would be worth less than $100,000 in today’s money. And remember that the last time a 90% fall happened in the Dow in 1929-32, it took 25 years to get back to the previous peak.
A different story: Stock market expressed in real money (Gold) since 1861
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