The "Dow price-to-Gold price-Ratio"

is the mathematical measurement of the number of gold ounces it takes to buy one share of each Dow stock.

 Simplifying the Dow/Gold Ratio

Since the application in 1900 the Dow to Gold ratio has an unblemished record in its ability to graphically demonstrate the imbalance between U.S. stocks measured in U.S. Dollars versus Gold.  Every peak and valley has amazingly similar global circumstances and economic conditions.

 The three ration bottoms shown on the chart, all occurred during times of war and weak economic conditions, such conditions resulted in severe financial and personal gloom, a general condescension for paper denominated assets and what they represented. During 1980 the ratio temporarily touched 1:1. The Dow was trading at a range of 850 with an ounce of gold reaching an all time high of $874 per once. If you were to adjust the $874 per once price to today's inflation, gold would need to be priced well over $2,300 per once. During 1980 interest rates were in the double digits and inflation surged out of control.

 Leading up to this period, during and shortly after each ratio peak, the spot price of gold was far too undervalued. Much like what's occurring at present time, there were numerous factors contributing to such conditions. The Federal Reserve extended credit by the means of lowering the "Fed-Fund" rate, resulting in a monetary bubble. The extended credit produce hyper levels of optimism and bullishness among the American public. One comparison can be made to the "everyone can own a house & make millions in the real state market" attitude and practices done by many Americans. It seem as prosperity would continue forever. Foreclosure rates and sliding home prices have recently shown otherwise. Many prominent economist and leading real state investors have predicted this is only the beginning!

 The Dow/Gold ratio peak of 2000 exceeded 45:1, 60% higher than the 1980 peak and 247% higher than 1929.

 The writing is on the wall, current economic conditions all point to the biggest precious metals Bull Market ever seen!

 Open your account today and position yourself properly before the next leg up of this monumental Bull Market.

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