russells latest

  1. 217 Posts.
    Here is part of Russell's latest (copied from Gold-Eagle):

    Now on to the Dow/Gold Ratio. The Dow Jones Industrial Average is said to be the benchmark for American business and serves well as a proxy for paper assets, while gold represents all things tangible. It is fascinating to view this relationship as a ratio over time. The ratio topped out in August 1999 just prior to the Washington Agreement when it took almost 45 ounces of gold to buy the Dow. Today you can buy the Dow with roughly 25 ounces of gold. By the time the primary trends exhaust themselves, I expect the Dow / Gold ratio to bottom out between 1 (one) and 5 (five). You did read it correctly. The ratio should bottom when the Dow can be bought with one to five ounces of gold. That is where it has bottomed every time in the past 100 years. I do not have the exact numbers, but the ratio last bottomed in 1979 at 1, with gold at $850 per ounce and the Dow Industrials at roughly 850.

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