Monday, June 27, 2011
Dow-Gold Ratio spawns a screed
The chart of the Dow as measured in gold (as opposed to Federal Reserve debt notes) continues to put the lie to any narrative that thinks it can preach about the value of stocks, at least in relation to things of actual value.
Abbey Cohen's "US stock market right now is priced about 15% below where it should be" and the various 'stocks for the long run' crazies out there come to mind. This is a chart that shows the 'stock & trade' of a formerly great nation down trending for a decade now, as the US desperately tries to meet each new challenge with renewed inflation attempts. It's actually kind of sad, really.
I'd expect this down slope to remain in place until we change our ways on a mass fundamental level in the public's awareness and education, which would eventually demand change in official policy. It could be a long wait.