Dow/Gold ratio

I'm looking for the Dow/Gold ratio to reach 4, which means gold could rise to $1350/ounce and the Dow Jones Industrial Average drops to 5400.

Gold is a store of value that doesn't pay any rate of return (interest). However, there is no counterparty risk, as it is accepted as payment anywhere in the world.

When times are good, we look to stocks to give us capital appreciation and dividends. When times are bad, we revert to gold to protect our purchasing power against inflation, and preserve our asset values in a deflationary environment.

Right now we're at a ratio of 7.5. Look at the historical charts and you'll see during the depths of the Great depression, the ratio was 2:1. However, during the 1980 recession, the ratio was 1:1.

I don't even want to think about this possibility, but it has happened before.

Remember, nothing goes up or down in a straight line--expect high volatility. But don't be on the wrong side of this move. Consult your financial advisor, if he/she still is employed.